Royal Mail’s prospective new owner has vowed to maintain the service’s requirement to deliver letters six days a week throughout the UK.

The postal service’s owner International Distribution Services PLC agreed to a £3.57 billion takeover offer from Czech billionaire Daniel Kretinsky’s EP Group in May.

The move will see it taken off the public markets and into the hands of Kretinsky’s firm, which already has a 27% shareholding in the business.

Royal Mail shareholders will vote on the deal at their next meeting on September 27.

IDS shares closed 1.0% higher at 333.20 pence each on Monday in London, giving it a market capitalisation of £3.19 billion.

In an interview with the BBC, Kretinsky said he will honour Royal Mail’s Universal Service Obligation (USO) for as long as he is in charge.

The USO requires Royal Mail to deliver first-class post six days a week, to all UK addresses under a ‘one-price-goes-anywhere’ basis.

Kretinsky told the broadcaster: ‘As long as I’m alive, I completely exclude this, and I’m sure that anybody that would be my successor would absolutely understand this.

‘I say this as an absolutely clear, unconditional commitment: Royal Mail is going to be the provider of Universal Service Obligation in the UK, I would say forever, as long as the service is going to be needed, and as long as we are going to be around.’

IDS has proposed to reform the system, which it estimates could result in the reduction of about 7,000 to 9,000 daily delivery routes and up to 1,000 voluntary redundancies.

Kretinsky also told the BBC that, although he is not in favour of shared ownership, he is ‘very open’ to profit sharing.

Unions representing postal workers have previously called for staff to be given a stake in the company via a shake-up of its structure.

But Kretinsky said he did not think ownership stake was ‘the right model’.

‘The logic is: share of profit, yes, (but an) ownership structure creates a lot of complexity,’ he told the broadcaster.

‘For instance, what happens if the employee leaves? He has shares, he is leaving, he is not working for the company, he (still) needs remunerating.’

He added he would prefer to ‘remunerate the people who are working for the company, and creating value for the company’.

Kretinsky, who is said to have a net worth of £6 billion, has a string of other investments, including stakes in London football club West Ham United and supermarket company J Sainsbury PLC.

The potential sale of Royal Mail’s owner has attracted heavy scrutiny, with senior politicians and unions voicing concerns over the future of the postal service.

The government has the power to block the deal altogether with Labour vowing to ‘robustly scrutinise’ the takeover and give workers a ‘stronger voice’ in its election manifesto.

By John Besley

Press Association: Finance

source: PA

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