NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

FOR IMMEDIATE RELEASE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

29 MAY 2024

RECOMMENDED CASH OFFER

for

International Distribution Services plc

by

EP UK Bidco Limited

(a newly formed company owned indirectly by (i) EP Corporate Group, a.s. ("EP") and (ii) J&T Capital Partners, a.s. ("J&T"))

to be implemented by means of a takeover offer
under Part 28 of the Companies Act 2006

1          Introduction

The boards of directors of EP UK Bidco Limited ("Bidco") and International Distribution Services plc ("IDS") confirm that they have reached agreement on the terms and conditions of a recommended cash offer by Bidco for the entire issued, and to be issued, ordinary share capital of IDS, other than the IDS Shares owned or controlled by VESA. As at 28 May 2024 (being the last Business Day prior to the date of this announcement), VESA owned or controlled 264,138,365 IDS Shares, representing approximately 27.6% of IDS' issued ordinary share capital as at such date.

2          The Acquisition

Under the terms of the Acquisition, which will be subject to the Conditions and further terms set out in Appendix 1 to this announcement and the full terms and conditions to be set out in the Offer Document, each IDS Shareholder will be entitled to receive:

for each IDS Share: 370 pence

comprised of:

·    cash consideration of 360 pence per IDS Share;

·    the final dividend in respect of the Financial Year ended 31 March 2024 of 2 pence per IDS Share (the "2024 Final Dividend") and which is not conditional upon the Acquisition becoming Unconditional; and

·    a special dividend of 8 pence per IDS Share which will be conditional upon the Acquisition becoming Unconditional (the "Special Dividend"),

together, the "Total Value".

In the event the Acquisition does not become Unconditional, there will be no Special Dividend. However, if approved by IDS Shareholders, the 2024 Final Dividend is expected to be paid on 30 September 2024 to IDS Shareholders on the register of members of IDS on 23 August 2024.

The Total Value per IDS Share represents a premium of approximately:

·    72.7% to the IDS Closing Price of 214 pence on 16 April 2024 (being the last Business Day before the commencement of the Offer Period);

·    63.2% to the one-month volume-weighted average price as at close of business on 16 April 2024 (being the last Business Day before the commencement of the Offer Period); and

·    53.1% to the 12-month volume-weighted average price as at close of business on 16 April 2024 (being the last Business Day before the commencement of the Offer Period).

The Total Value values IDS' entire issued, and to be issued, ordinary share capital at approximately £3,568 million on a fully diluted basis, and implies an enterprise value of £5,284 million.

2024 Final Dividend

The IDS Directors intend to recommend the 2024 Final Dividend of 2 pence per IDS Share for the Financial Year ended 31 March 2024 for approval, in accordance with the existing dividend policy of IDS. If approved by IDS Shareholders at the 2024 annual general meeting of IDS scheduled to be held on 25 September 2024, the 2024 Final Dividend is expected to be paid on 30 September 2024 to IDS Shareholders on the register of members of IDS on 23 August 2024.

Under the terms of the Acquisition, if approved by IDS Shareholders at the 2024 annual general meeting, all IDS Shareholders (including, if applicable, VESA) on the register of members of IDS at the relevant record date will be entitled to receive the 2024 Final Dividend regardless of whether the Acquisition becomes Unconditional and without any reduction in the Total Value if the Acquisition becomes Unconditional. If the 2024 Final Dividend is not approved by IDS Shareholders, there shall be no increase to the cash consideration of 360 pence per IDS Share and the Total Value shall be an amount equal to 360 pence per IDS Share plus, if the Acquisition becomes Unconditional, the Special Dividend.

Special Dividend

The IDS Directors also intend to declare the Special Dividend of 8 pence per IDS Share, which will be conditional upon the Acquisition becoming Unconditional. Therefore, in the event that the Acquisition does not become Unconditional, there will be no Special Dividend.

If the Acquisition becomes Unconditional, the Special Dividend is expected to be paid to all IDS Shareholders (including, if applicable, VESA) on the register of members of IDS on the record date which is expected to be the date on which the Offer becomes or is declared unconditional (or, if the Acquisition is implemented by way of a Scheme, 6.00pm (London time) on the Business Day immediately after the date of the Sanction Hearing). It is intended that, subject to the Acquisition becoming Unconditional, settlement of the Special Dividend will take place within 14 days of the date on which the Acquisition becomes Unconditional and in the manner to be specified in the Offer Document (or, if applicable, the Scheme Document). Under the terms of the Acquisition, IDS Shareholders on the register of members of IDS at the relevant record date will be entitled to receive the Special Dividend without any reduction in the Total Value if the Acquisition becomes Unconditional.

IDS Shareholders who are not entitled to receive the 2024 Final Dividend and/or the Special Dividend shall receive the remainder of the Total Value.

Acquisition structure

It is intended that the Acquisition will be implemented by way of a takeover offer for the purposes of Part 28 of the 2006 Act (although Bidco reserves the right to effect the Acquisition by way of a Scheme, subject to the consent of the Panel and the consent of IDS in accordance with the terms of the Cooperation Agreement). The Conditions to the Acquisition are set out in full in Appendix 1 to this announcement.

Other terms of the Offer

The IDS Shares will be acquired pursuant to the Offer fully paid and free from all liens, charges, equities, encumbrances, rights of pre‑emption and any other interests of any nature whatsoever and together with all rights attaching thereto, including without limitation voting rights and the right to receive and retain in full all dividends and other distributions (if any) announced, declared, made or paid following the Acquisition becoming or being declared unconditional, other than the 2024 Final Dividend and the Special Dividend.

If, on or after the date of this announcement, any dividend, distribution and/or other return of capital or value, other than the 2024 Final Dividend of 2 pence per IDS Share and the Special Dividend of 8 pence per IDS Share, is announced, declared, made or paid in respect of the IDS Shares, Bidco reserves the right to reduce the consideration payable under the terms of the Acquisition for the IDS Shares by the aggregate amount of such dividend and/or distribution and/or other return of capital or value (but excluding the aggregate amount so payable in respect of the Excluded Shares), in which case any reference in this announcement to the consideration payable under the terms of the Acquisition will be deemed to be a reference to the consideration as so reduced. Any exercise by Bidco of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the terms of the Offer or the Acquisition. In such circumstances, IDS Shareholders would be entitled to retain any such dividend, distribution and/or other return of capital or value.

3          Commitments and intentions for IDS

The IDS Board believes that the undertakings to be offered to the UK Government and the other contractual commitments provided by EP and Bidco to IDS (as described below) together constitute a comprehensive package of protections for IDS, Royal Mail and GLS, and provide the IDS Group's customers, employees, unions, regulators and broader stakeholders with safeguards for the provision of the Universal Service Obligation (the "USO"), the ongoing financial stability of Royal Mail, the maintenance of employee benefits for the IDS Group's employees, and Royal Mail's broader role in the United Kingdom.

In addition, the IDS Board welcomes Bidco's intentions for IDS, as set out in section 16 (Strategic plans, Directors, management, employees, pensions, research and development and locations) below, including Bidco's intentions in relation to the IDS Group's strategy, employees and sustainability goals.

4          Undertakings to the UK Government

Royal Mail performs critical functions in the markets where it operates, and the IDS Board is particularly mindful of Royal Mail's unique heritage and responsibilities as the designated Universal Service Provider in the UK and as a key part of national infrastructure.

In assessing the Offer, the IDS Board has also been very mindful of the impact on Royal Mail and its stakeholders and employees, as well as broader factors, as described in section 8 (Background to and reasons for the recommendation) below. The IDS Board has agreed with Bidco and EP in the Cooperation Agreement that Bidco and EP will offer, as soon as reasonably practicable following the date of this announcement, the UK Government the following legally binding undertakings (the "Undertakings"):

USO

·    for the five year period commencing on and from completion of the Acquisition (the "Relevant Period"), to ensure that Royal Mail continues as the Universal Service Provider for the purposes of the Postal Services Act 2011 (the "PSA") and secondary legislation and regulations in effect thereunder; and

·    for the Relevant Period, to ensure that Royal Mail complies with the regulatory conditions applicable to Royal Mail in its capacity as the Universal Service Provider imposed by Ofcom from time to time (including continuing to provide the "one-price-goes-anywhere" service in the United Kingdom and that first class letters are delivered six days a week);

Safeguarding and protection of Royal Mail

·    for the Relevant Period, subject to certain limited exceptions stated in the Cooperation Agreement, to ensure that Royal Mail does not make any distribution, return of capital, non-arm's length transfer of assets, upstream loan or repayment of the principal on any downstream loan (each a "Return of Value"); unless, following any such Return of Value, Royal Mail would have a net leverage ratio of 2:1 or less and it would reasonably be expected that there would be no material adverse effect on Royal Mail's ability to discharge its obligations as the Universal Service Provider under the PSA;

·    for the Relevant Period, if and to the extent any shares in GLS are transferred to a third party, subject to certain exceptions stated in the Cooperation Agreement, not to make any Return of Value outside of the IDS Group; unless, following any such Return of Value, Royal Mail would have a net leverage ratio of 2:1 or less and it would reasonably be expected that there would be no material adverse effect on Royal Mail's ability to discharge its obligations as the Universal Service Provider under the PSA; and

·    for the Relevant Period, to ensure that no member of the Royal Mail Group and no assets of the Royal Mail Group are subject to additional security, guarantees or third-party credit support in respect of any debt incurred by Bidco to finance the Acquisition; unless, following any such matters, Royal Mail would have a net leverage ratio of 2:1 or less and it would reasonably be expected that there would be no material adverse effect on Royal Mail's ability to discharge its obligations as the Universal Service Provider under the PSA;

Royal Mail and GLS Group

·    for the three year period commencing on and from the completion of the Acquisition, to ensure that there is no change in the control of GLS or Royal Mail;

Brand

·    for the Relevant Period, to ensure that Royal Mail: (i) retains its legal name, Royal Mail Group Limited; (ii) carries on business under the trading name "Royal Mail"; and (iii) continues to use the Royal Cypher in accordance with existing arrangements and uses its commercially reasonable endeavours to take steps necessary to continue such use;

Headquarters and tax residency

·    for the Relevant Period, to ensure that IDS and Royal Mail maintain their headquarters in the UK; and

·    for the Relevant Period, to ensure that IDS and Royal Mail and each of their respective subsidiaries (but excluding GLS and its subsidiaries) which is UK tax resident at the date of the Cooperation Agreement remains tax resident in the UK;

Unions

·    for the Relevant Period, to ensure that Royal Mail (and each of its relevant subsidiaries which employs staff) continues to recognise the CWU and CMA Unite under the Trade Union & Labour Relations (Consolidation) Act 1992 (if applicable) or any similar legislation in any other jurisdiction and in accordance with the relevant agreements in place with such unions;

Pensions

·    for the Relevant Period, to ensure that Royal Mail does not utilise any amount of surplus refunded from its defined benefit pension arrangement known as the Royal Mail Pension Plan (the "RMPP") to the scheme employer for the purposes of financing, funding or declaring any Return of Value by Royal Mail;

Governance and transparency

·    for the Relevant Period, to ensure Royal Mail has a board comprising at least five directors, of whom at least two individuals shall be non-executive directors elected or proposed by Royal Mail, Bidco or the shareholder(s) of Royal Mail who would be treated as "independent" for the purposes of the UK Corporate Governance Code published by the Financial Reporting Council (as in force as at the date of this announcement);

·    if a change of control of Royal Mail occurs during the Relevant Period, to ensure that the new parent adheres to the terms of the Undertakings;

·    for the Relevant Period, to comply with the provisions of the National Security and Investment Act 2021 (and any secondary or successor legislation thereto) that are applicable to the Royal Mail Group; and

·    for the Relevant Period, to ensure that Royal Mail complies with its financial reporting and accountability obligations under any regulatory conditions imposed by Ofcom from time to time under the PSA; and

Listing

·    for the Relevant Period, in the event that any member of the Royal Mail Group or an intermediate holding company of Royal Mail were to be listed, to ensure that the primary listing takes place on the Main Market or the Alternative Investment Market.

None of the statements in this section, or any of the Undertakings referred to above, are "post-offer undertakings" for the purposes of Rule 19.5 of the Takeover Code.

5          Contractual commitments

The IDS Board has also agreed the following contractual commitments with Bidco:

USO

·    EP and Bidco have agreed to use their commercially reasonable endeavours to support Royal Mail's proposal in relation to the USO (or any updated proposal as put forward by Royal Mail). EP and Bidco have further agreed not to propose (publicly or privately, or by procuring any other person to do the same) any alternative proposal for the reform of the USO until Ofcom has finally determined the outcome of its consultation in relation to the USO.

Pensions

·    For a period of two years from the Unconditional Date:

·    Bidco has contractually committed to IDS that, to the extent that the Royal Mail Collective Pension Plan (the "RMCPP") has not been fully launched by completion of the Acquisition, EP will use all commercially reasonable endeavours to continue working with Royal Mail and the trustee of the RMCPP to bring about the launch as soon as reasonably practicable, and that in the meantime the rate of benefit accrual in the defined benefit cash balance section of the RMPP (the "DBCBS") (and the rates of contribution to the Royal Mail Defined Contribution Plan (the "RMDCP")) will be no lower than those which apply as at the date of this announcement; and

·    once launched, the RMCPP will replace both the DBCBS and the RMDCP (the latter being the principal current Royal Mail defined contribution arrangement), for the provision of future pension benefits to current and future Royal Mail employees.  Bidco has contractually committed to IDS that it will (subject to applicable law and the relevant plan's governing documentation) instruct Royal Mail to ensure that contributions are then paid to that plan at rates agreed with the relevant plan's trustees and representatives of employees.

Employees and Unions

·    Compensation and Benefits - for at least two years following completion of the Acquisition, Bidco has contractually committed to IDS that:

·    base salaries, wage rates and cash/equity incentive opportunities will, at a minimum, be maintained (save for any adjustments to cash/equity incentive opportunities to take into account the de-listing of IDS Shares); and

·    benefits and allowance packages (including pension benefits) will be no less favourable than those in place as at completion of the Acquisition.

·    Union recognition - in addition to the Undertaking referred to above, for at least five years following completion of the Acquisition, Bidco has contractually committed to IDS that it will continue to recognise all unions recognised in respect of employees of the IDS Group as at the date of this announcement.

None of the statements in this section, or any of the contractual commitments from Bidco to IDS referred to above, are "post-offer undertakings" for the purposes of Rule 19.5 of the Takeover Code.

6          Background to and reasons for the Acquisition

VESA, the private investment arm of the shareholders of EP, has been a substantial shareholder in IDS since 2020. Despite significant challenges, both VESA and EP remain convinced that IDS is a strong business with solid foundations and the potential to become one of the leading postal logistics groups in Europe, subject to successful transformation, modernisation (including USO reform), investments in out-of-home solutions and the return to a growth trajectory both in revenue and market opportunity.

IDS, comprising Royal Mail and GLS, operates in a sector with positive tailwinds and clear future growth opportunities driven particularly by increasing e-commerce penetration, but also faces strong competition in all the markets in which it operates. GLS is a fully integrated pan-European delivery business, with a successful network, business model and track record of capitalising on growth opportunities. Royal Mail owns and operates an extensive delivery network across the UK, is a key part of the UK's national infrastructure and benefits from an iconic domestic brand supported by its role as the UK's sole designated Universal Service Provider. With progress being made on Royal Mail's implementation of the Business Recovery, Transformation and Growth agreement entered into with the CWU in 2023, and with further progress on the ongoing transformation of Royal Mail since the appointment of Martin Seidenberg as Chief Executive Officer, IDS has been put on stronger footing. However, headwinds remain, due to difficult macroeconomic and competitive environments and continued letter volume decline, and further investment is required to successfully deliver a return to growth and profitability.

Financial performance at Royal Mail has been negatively impacted by structural letter volume decline for many years and Royal Mail has been adapting its business and network to deal with the growing volumes of parcels and declining volumes of letters. The IDS Board has called for regulatory reform to the USO for more than four years and believes that the absence of regulatory action has held back Royal Mail's transformation and limited its ability to adapt quickly enough to the competitive pressures in the parcel market. In January 2024, Ofcom called for input on the future of the universal service. Royal Mail has submitted a proposal, which Bidco fully supports, to ensure Royal Mail continues to deliver a one-price-goes-anywhere universal service throughout the whole of the United Kingdom and a choice of First and Second Class services, with First Class letters still delivered six days a week. The changes proposed do not require legislative change and could be implemented by Ofcom. Following completion of the Acquisition, Bidco intends to explore, with Ofcom and the UK Government, this approach to delivering the USO on a sustainable basis.

The postal sector remains highly competitive and preserving Royal Mail's position as an important provider of postal and parcel delivery services is key to the future success of Royal Mail and its ability to modernise and improve service quality for customers. However, whilst Royal Mail's business is now on stronger footing, the scale of the recent losses incurred, combined with market share decline due to factors including past industrial action, has delayed much-needed modernisation and investment.

GLS has delivered significant growth and has adapted more quickly to the growth in out-of-home solutions and changes in parcel market dynamics. With sufficient further investment, GLS and the IDS Group have the potential to be one of the major postal logistics players across Europe and internationally.

Both Royal Mail and GLS require continued and further investment, particularly into parcel lockers and out-of-home solutions, in order to grow and protect their respective businesses. EP believes that Royal Mail, GLS and the IDS Group as a whole would be better placed to obtain and structure such investment as a private company, allowing IDS to focus on long-term growth, free from the short-term financial goals and dividend pressures of the public markets.

Against this backdrop, EP believes that IDS would be better positioned to achieve its potential under EP's ownership. EP is a private, long-term investor with substantial access to capital and significant knowledge of the postal, logistics and distribution sectors. Since 2009, EP has been a responsible steward of critical energy and infrastructure assets throughout the UK and Europe, with a long-term outlook and a track record of developing and investing in these assets. EP owns and operates regulated assets with unionised workforces and has a strong track record of collaborative engagement with employees, representatives and unions. EP recognises the unique role that Royal Mail plays as the designated Universal Service Provider and a key part of national infrastructure in the UK. EP has agreed with IDS in the Cooperation Agreement that EP will offer the UK Government the legally binding Undertakings as soon as reasonably practicable following the date of this announcement covering a number of broader factors, as described in section 4 (Undertakings to the UK Government) above.

EP believes that its significant financial resilience combined with its proven track record of responsible stewardship, investment and support of critical UK and European infrastructure assets, including in postal, logistics and distribution assets, puts it in a unique position to support and accelerate IDS' path to becoming a modern postal operator and one of the leading logistics service providers for the benefit of all its stakeholders, including employees, trade unions, customers and governments. EP recognises the significance and importance of the IDS business to these stakeholders, particularly in the UK as the country's sole designated Universal Service Provider, and believes that following completion of the Acquisition IDS would be in a stronger position to serve them over the long-term, as it will benefit from: 

·    the support of a large, cash-generative private investor group with a long-standing investment grade credit rating, and history of reinvestment in, and further development of, its businesses;

·    the ability to take a long-term approach to pursuing growth initiatives and creating new revenue streams, including out-of-home solutions across Royal Mail's UK and GLS' European and North American footprint;

·    more flexible access to investment capital, allowing IDS to accelerate much-needed near-term investments to capture and expand the market opportunity as part of the long-term strategic view for the business; and

·    the certainty and stability afforded by committed private ownership.

EP therefore believes the proposed Acquisition would provide IDS with an opportunity to strengthen its financial future, pursue long-term growth, better serve its customers and embed a collaborative relationship with its employees and trade unions.

7          Recommendation

The IDS Directors, who have been so advised by Barclays, BofA Securities and Goldman Sachs as to the financial terms of the Acquisition, unanimously consider the terms of the Acquisition to be fair and reasonable. In providing their advice, Barclays, BofA Securities and Goldman Sachs have taken into account the commercial assessments of the IDS Directors. Barclays, BofA Securities and Goldman Sachs are providing independent financial advice to the IDS Directors for the purposes of Rule 3 of the Takeover Code.

Accordingly, the IDS Directors intend to recommend unanimously that IDS Shareholders should accept or procure the acceptance of the Offer, or (in the event that the Acquisition is implemented by way of a Scheme) to vote in favour of the Scheme at the requisite Court Meeting and the Resolutions at a General Meeting of IDS Shareholders, as the IDS Directors who hold IDS Shares have irrevocably undertaken to do in respect of their own beneficial holdings totalling 183,236 IDS Shares (representing approximately 0.019% of the existing issued ordinary share capital of IDS) as at 28 May 2024, being the last Business Day prior to the date of this announcement. Further details of these irrevocable undertakings, including the circumstances in which they cease to be binding, are set out in Appendix 3 to this announcement.

8          Background to and reasons for the recommendation

The IDS Board firmly believes that IDS is a strong business with solid foundations and significant potential to become one of the leading postal logistics groups in Europe and internationally.

Royal Mail is the UK's designated Universal Service Provider with a strong brand and unparalleled scale and reach to all 32 million UK addresses. GLS is a leading international carrier operating one of the largest ground-based parcel delivery networks in Europe, with global reach and a strong position in the cross-border parcel segment. Both businesses are well positioned to build on these foundations with continued growth through operational excellence, digital transformation and the ongoing roll out of out-of-home solutions.

IDS' new management team is focused on delivering a modernisation and transformation programme for Royal Mail and further growing GLS to ensure both companies reach their potential. This is resulting in clear operational, service and financial improvements in spite of the challenging macro-economic backdrop: Royal Mail has successfully won back customers lost during past industrial action and delivered the best peak performance in four years; GLS has a proven track record of top line growth, strong margins and cash generation and has consistently been one of the most profitable players within the parcel delivery segment.

At the same time, the IDS Board recognises that financial performance at Royal Mail has been negatively impacted by a range of factors over a number of years, including a challenging macroeconomic environment, industrial action and the lack of action by the UK Government and Ofcom on USO reform.

Royal Mail remains the largest mail provider in the UK and is becoming better placed to compete in the parcel market as a result of material investment in parcel automation and two new parcel hubs. Despite this investment, Royal Mail has lost market share in recent years as new competitors have entered the market without the financial burden and high fixed costs associated with maintaining a network to deliver the current USO. This has contributed to material financial losses in recent years and limited Royal Mail's ability to invest and transform in step with the changing competitive environment. The proposal put forward by Royal Mail includes a net reduction of approximately 7,000 to 9,000 daily delivery routes, which is expected to lead to fewer than 1,000 voluntary redundancies.  IDS has called on the UK Government and Ofcom to reform the universal service for more than four years. The IDS Board believes that the Acquisition would enable Royal Mail to meet these challenges and that EP is well placed to support Royal Mail in its discussion with its stakeholders regarding USO reform. Whilst Ofcom has now accepted that Universal Service reform is now required, it has not set out what reform will look like, nor a timetable for implementation.  

Despite the lack of regulatory change, under Martin Seidenberg's leadership Royal Mail is now stabilised and is making good progress implementing the agreement reached with the CWU. The changes secured in the agreement with the CWU will enable a more flexible and efficient model and support Royal Mail's growth in next day and larger parcels. Royal Mail has also started to invest in its out-of-home strategy through partnerships with Quadient lockers and Collect+ stores for parcel pick up and drop off. To deliver sustainable profitable growth, Royal Mail requires further significant investment in automation, network changes and rapid expansion of its out-of-home solutions, especially parcel lockers.

While the IDS Board is confident that IDS remains well positioned, with a standalone strategy which would deliver value for IDS Shareholders over the long term, significant uncertainty remains as to the speed of Royal Mail's transformation and USO reform, and the consequent impact on the IDS Group's performance. IDS needs to make significant investment into strategic areas such as the network and out-of-home solutions. The ability for IDS to make significant investment at pace may be constrained given the current economic environment and increasing pressure on wage rates due to tight labour markets and upcoming pay deals from 2025. In light of growing competitive threats, an inability to make rapid and significant investment in strategic areas would potentially leave IDS restricted and exposed in these strategically important areas for too long. The IDS Board believes that exiting public markets would enable IDS to become more agile in responding to these pressures.

In this context, although the IDS Board did not solicit an offer and a number of lower proposals from EP were rejected, the IDS Board believes that the terms of the Acquisition are fair and reasonable and that the Acquisition would enable IDS to substantially accelerate and de-risk the delivery of its strategic plans, including through better access to further investment as a private company.

Financial terms of the Acquisition

In considering the financial terms of the Acquisition and determining whether they reflect an appropriate valuation of IDS and its future prospects, the IDS Board has taken into account a number of factors, including the following:

·    the IDS Board has reviewed a full range of valuation methodologies, including analysis of the discounted future cash flows of the business, comparable company analysis and future share price analysis, in each case based on financial forecasts for the business approved by the IDS Board, and has taken advice from its three financial advisers;

·    the IDS Board has also reviewed the Offer in the context of alternative strategic options, including the further potential disposal of real estate and the likely timing and nature of regulatory change to the USO, and associated risk-adjusted cost savings arising from such a change; and

·    the terms of the Acquisition represent an immediate and significant premium to the undisturbed Closing Price of 214 pence per IDS Share on 16 April 2024 (being the last Business Day before the commencement of the Offer Period), providing IDS Shareholders the opportunity to realise the value inherent in the IDS business in cash without the execution risk associated with delivering IDS' current strategy in the absence of USO reform:

·    the terms of the Acquisition represent a premium of approximately 72.7% to the Closing Price of 214 pence per IDS Share on 16 April 2024, the last business day before the commencement of the Offer Period, which represents a top quartile premium across each of the previous 10 years for acquisitions of UK public companies with an offer equity value in excess of £1 billion;

·    the terms of the Acquisition represent a premium of approximately 63.2% to the volume-weighted average price of 227 pence per IDS Share for the one-month period ended on 16 April 2024, the last business day before the commencement of the Offer Period; and

·    the terms of the Acquisition represent a premium of approximately 53.1% to the volume-weighted average price of 242 pence per IDS Share for the 12-month period ended on 16 April 2024, the last business day before the commencement of the Offer Period.

Interests of the broader stakeholders

Royal Mail performs critical functions in the markets where it operates, and the IDS Board is particularly mindful of Royal Mail's unique heritage and responsibilities as the designated Universal Service Provider in the United Kingdom and a key part of national infrastructure. In assessing the terms of the Acquisition and its recommendation, the IDS Board has also been very mindful of the impact on Royal Mail and its stakeholders and employees, as well as broader factors.

To this end, the IDS Board has sought, and EP has agreed as part of the Offer, a set of legally binding Undertakings to be offered to the UK Government and contractual commitments from Bidco to IDS to protect broader interests and recognise Royal Mail's status as a key part of national infrastructure, which are described in detail in sections 4 (Undertakings to the UK Government) and 5 (Contractual commitments) above.

IDS Board's conclusions

The IDS Board believes that EP, with its significant knowledge of the postal, logistics and distribution sectors and as a long-term investor in infrastructure, has both the expertise and access to capital to accelerate and de-risk the delivery of IDS' strategic plans over the long-term.

The IDS Board considers the offer to be fair and reasonable and that it reflects the value of GLS' current growth plans and the progress being made on change at Royal Mail, as well as the execution risks associated with delivering longer term value for shareholders in light of uncertainty over the nature and timing of USO reform and the need for significant strategic investments.

Accordingly, following careful consideration (in line with their fiduciary duties) of both the financial terms of the Acquisition and the commitments and undertakings that EP has agreed to offer and EP's plans for IDS, the IDS Board intends to recommend unanimously the Acquisition to IDS Shareholders.

9          Information relating to Bidco, EP, VESA and J&T

Bidco

Bidco is a private limited company incorporated in England and Wales. Bidco is a newly-formed vehicle, indirectly owned by (i) EP and (ii) J&T. Bidco was formed for the purposes of the Acquisition and has not traded since its date of incorporation, nor has it entered into any obligations other than in connection with the Acquisition. As at completion of the Acquisition, it is intended that Bidco will be indirectly owned in the following proportions (i) EP will own 56% plus one share and (ii) J&T will own 44% less one share.

The current directors of Bidco are Pavel Horský, Marek Spurný, Roman Šilha and Jan Bílek. Further details in relation to Bidco will be contained in the Offer Document.

EP and VESA

EP has an extensive portfolio of significant industrial assets across Europe and is a long-term investor in the UK, founded on energy and infrastructure and later diversified into other sectors including food wholesale, food and other consumer retail, logistics, media and e-commerce. Companies in which EP is the controlling shareholder or exercises the majority of voting rights have revenues of around €100 billion and annual EBITDA of around €8 billion. Across the UK and Europe, EP operates vital energy and infrastructure assets with unionised workforces including gas pipelines and gas storage facilities, power plants and electricity networks.

EP Equity Investment S.à r.l., the 100% direct shareholder of VESA and controlling shareholder of Casino Guichard-Perrachon, S.A., is the EP group's investment arm focused on strategic long-term investments in publicly traded companies across Western Europe and the United States. EP Equity Investment S.à r.l. concentrates its attention on sectors where it can match structural growth opportunities with its specific expertise and experience, in particular in food wholesale, food and other consumer retail, logistics, media, and e-commerce. The current market value of the portfolio owned by EP Equity Investment S.à r.l. and VESA is approximately €3.3 billion. The EP group views the UK as an attractive and dynamic market for investment. The EP group has a long-term outlook and is proud to support the businesses in which it invests, including Royal Mail through VESA's shareholding in IDS.

J&T

J&T is a Czech-based private investment company, ultimately controlled by J&T Private Equity Group Limited. It invests on behalf of a group of private investors from Slovakia and the Czech Republic in businesses in various sectors in Europe, including energy, infrastructure and real estate. As at 31 December 2023, the total value of assets in which J&T is invested was approximately €3.4 billion. J&T has been a long-term business partner of EP and its founder and controlling shareholder, Daniel Křetínský. Consistent with the approach taken for other investments in which both EP and J&T have participated, J&T is in the position of a financial investor; it has no co-management role and has no joint control in relation to Bidco.

10        Information relating to IDS

IDS is a leading provider of postal and delivery services in the UK, with significant operations in continental Europe. IDS is a holding company, which includes two separate operations: its UK-based operations under Royal Mail and its international operations under GLS.

Royal Mail's origins date back nearly 500 years to the time of King Henry VIII. Today, IDS' core business is the collection, sorting, transportation and delivery of parcels and letters in the UK, leveraging its broad networks and powerful brands, which underpin strong positions in the UK's parcel and letter delivery markets. Royal Mail is the UK's designated Universal Service Provider with a strong brand and unparalleled scale and reach to all 32 million UK addresses. GLS is a leading international carrier operating one of the largest ground-based parcel delivery networks in Europe, with global reach and a strong position in the cross-border parcel segment.

IDS Shares are publicly traded on the Main Market (symbol: IDS). IDS is headquartered in London and its registered office is at 185 Farringdon Road, London, United Kingdom, EC1A 1AA.

For the Financial Year ended 31 March 2024, IDS reported total revenue of approximately £12,679 million.

11        Irrevocable Undertakings

As described above, the IDS Directors who hold IDS Shares have irrevocably undertaken to accept (or, where applicable, procure the acceptance of) the Offer and, if the Acquisition is subsequently structured as a Scheme, to vote (or, where applicable, procure voting) in favour of the resolutions relating to the Acquisition at the Meetings, in respect of their own beneficial holdings totalling 183,236 IDS Shares (representing approximately 0.019% of the existing issued ordinary share capital of IDS) as at 28 May 2024, being the Business Day prior to the date of this announcement. The irrevocable undertakings will remain binding in the event that a higher competing offer for IDS is made.

Further details of these irrevocable undertakings (including the circumstances in which they cease to be binding) are set out in Appendix 3 to this announcement.

12        Financing of the Acquisition

The cash consideration payable to IDS Shareholders under the terms of the Acquisition will be financed by a combination of new equity from EP, as well as fully underwritten debt facilities to be provided under the Interim Facilities Agreement and arranged by BNP Paribas S.A., Citibank N.A. London Branch, Societe Generale, London Branch, UniCredit Bank GmbH and UniCredit Bank Czech Republic and Slovakia, a.s. In addition to the equity contribution, following completion of the Acquisition EP will provide an equity commitment letter to Bidco to ensure a minimum level of available liquidity at IDS during the six month period following completion of the Acquisition.

J.P. Morgan, in its capacity as financial adviser to Bidco, is satisfied that sufficient cash resources are available to Bidco to satisfy in full the cash consideration payable to IDS Shareholders under the terms of the Acquisition.

The financing of the Acquisition is structured so that the investment grade credit rating of IDS is expected to be maintained. Following completion of the Acquisition, IDS is expected to be considered a highly strategic subsidiary of EP by the relevant ratings agencies. It is EP's intention to elevate IDS to a core subsidiary of EP, meaning that the rating of IDS would not be lower than the rating of EP, allowing IDS to benefit from being part of a group with an extensive portfolio of significant industrial assets with a long-term investment grade rating profile. EP takes a conservative approach to its capital structure and intends to continue operating EP on the basis that its current investment grade rating profile is maintained.

Further information on the financing of the Acquisition will be set out in the Offer Document.

13        Offer‑related arrangements

Confidentiality Agreement

On 15 May 2024, EP, on behalf of Bidco, and IDS entered into a Confidentiality Agreement in relation to the Acquisition, pursuant to which, amongst other things, each of EP and IDS have undertaken to: (i) subject to certain exceptions, keep information relating to each other and the Acquisition confidential and not to disclose it to third parties; and (ii) use such confidential information only in connection with the Acquisition. These confidentiality obligations will remain in force until the earlier of: (a) completion of the Acquisition; and (b) 15 May 2026. The Confidentiality Agreement also contains undertakings from EP, that for a period of 12 months after the date of the Confidentiality Agreement, neither EP nor any person acting in concert with EP who has received confidential information, will solicit or offer to employ any senior employee of the IDS Group or other IDS employees involved in negotiations relating to the Acquisition (subject to customary carve-outs). The standstill provisions contained in the Confidentiality Agreement have ceased to apply from the date of this announcement.

Clean Team Agreement

On 18 May 2024, EP and IDS entered into a Clean Team Agreement, which sets out, among other things, how any confidential information that is competitively sensitive can be disclosed, used or shared between EP's clean team employees and/or external advisers and IDS' clean team individuals and/or external advisers.

Confidentiality and Joint Defence Agreement

On 18 May 2024, EP, on behalf of Bidco, IDS and their respective external counsel entered into a Confidentiality and Joint Defence Agreement, the purpose of which is to ensure that the exchange and/or disclosure of certain materials relating to the parties and in relation to, in particular, the anti-trust and regulatory workstream only takes place between their respective external counsel and external experts, and does not diminish in any way the confidentiality of such materials and does not result in a waiver of any privilege, right or immunity that might otherwise be available.

Cooperation Agreement

On 29 May 2024, Bidco, EP and IDS entered into a Cooperation Agreement pursuant to which:

·    EP and Bidco have agreed to take all required or necessary steps as promptly as reasonably practicable to obtain the relevant antitrust clearances and satisfy, or procure the satisfaction of, the antitrust conditions prior to the Long Stop Date; and

·    EP and Bidco have also agreed to take commercially reasonable endeavours, as promptly as reasonably practicable, to obtain the regulatory clearances, and satisfy, or procure the satisfaction of, the relevant regulatory conditions prior to the Long Stop Date, provided that no member of the Bidco Group (or any other person) will be required to offer, agree or implement any remedy in relation thereto that is commercially unreasonable. Further details of the facts and circumstances that are considered commercially unreasonable are set out in the Cooperation Agreement.

The Cooperation Agreement will terminate in certain circumstances, including: (i) if the Acquisition is withdrawn, terminated or lapses prior to the Long Stop Date, (ii) if a third party announces a firm intention to make an offer for IDS which is recommended by the IDS Board or the IDS Directors withdraw their recommendation of the Acquisition, (iii) if, prior to the Long Stop Date, any Condition has been invoked by Bidco (with the consent of the Panel), (iv) if, prior to the Long Stop Date, a third party announces a firm offer for IDS which completes, becomes effective or is declared or becomes unconditional, (v) if the Offer is implemented by way of a Scheme, the Scheme is not approved by the holders of IDS Shares to which the Scheme applies or the Court refuses to sanction the Scheme, (vi) if the Offer does not become or is not declared unconditional by the Long Stop Date or (vii) otherwise as agreed between Bidco and IDS.

Schedule 1 to the Cooperation Agreement records Bidco's agreement with IDS to offer the Undertakings to the UK Government. Schedule 2 contains provisions that shall apply in respect of the IDS Share Plans, other incentive arrangements and employee-related matters. Schedule 3 contains provisions relating to the pension arrangements of IDS, including Bidco's commitments to instruct Royal Mail to maintain levels of contributions or (as the case may be) rates of accrual in the RMDCP or RMPP / DBCBS and, once established, to pay the agreed level of contributions to the RMCPP.

14        VESA Sale

Bidco has entered into a share purchase agreement dated 29 May 2024 with VESA (the "VESA SPA") under which VESA's existing shareholding of 264,138,365 IDS Shares (the "VESA SPA Shares") (representing approximately 27.6% of IDS' issued share capital as at 28 May 2024 (being the last Business Day prior to the date of this announcement)) will be sold to Bidco (the "VESA Sale"). Completion of the VESA Sale is subject only to a sufficient number of valid acceptances in respect of the Offer having been received (and not validly withdrawn) that would, when aggregated with the VESA SPA Shares and any other IDS Shares acquired or unconditionally agreed to be acquired by Bidco (either pursuant to the Offer or otherwise), result in the Acceptance Condition being satisfied.

If the Acquisition is withdrawn or lapses or the condition contained in the VESA SPA is not satisfied or waived by 29 August 2025 (or such later date as may be agreed by the parties to the VESA SPA), the VESA Sale will not occur.

The consideration payable by Bidco for each IDS Share in respect of the VESA Sale will be equal to the price per share received by the IDS Shareholders pursuant to the Offer (with such consideration being left outstanding).

15        Disclosure of interests in IDS securities

Except for the irrevocable undertakings referred to in section 11 (Irrevocable Undertakings) above and Appendix 3 and as disclosed below, as at 28 May 2024 (being the last Business Day prior to the date of this announcement) neither Bidco, nor any of its directors, nor, so far as Bidco is aware, any person treated as acting in concert (within the meaning of the Takeover Code) with it for the purposes of the Acquisition: (i) had any interest in or right to subscribe for or had borrowed or lent any IDS Shares or securities convertible or exchangeable into IDS Shares; or (ii) had any short positions in respect of relevant securities of IDS (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery; or (iii) has borrowed or lent any relevant securities of IDS (including, for these purposes, any financial collateral arrangements of the kind referred to in Note 3 on Rule 4.6 of the Takeover Code) save for any borrowed shares which have been either on-lent or resold; or (iv) is a party to any dealing arrangement of the kind referred to in Note 11(a) on the definition of acting in concert in the Takeover Code in relation to the relevant securities of IDS.

EP is not aware of any dealings in IDS Shares that would require a minimum level, or particular form, of consideration that it would be obliged to offer under Rule 6 or Rule 11 of the Takeover Code (as appropriate).

'Interests in securities' for these purposes arise, in summary, when a person has long economic exposure, whether absolute or conditional, to changes in the price of securities (and a person who only has a short position in securities is not treated as interested in those securities). In particular, a person will be treated as having an 'interest' by virtue of the ownership, voting rights or control of securities, or by virtue of any agreement to purchase, option in respect of, or derivative referenced to securities.

16   Strategic plans, Directors, management, employees, pensions, research and development and locations

Strategic plans for IDS

As described in section 6 (Background to and reasons for the Acquisition), EP believes that IDS is a strong business with solid foundations and the potential to become one of the leading postal logistics groups in Europe, subject to successful transformation, modernisation, investments in out-of-home solutions and the return to a growth trajectory both in revenue and market opportunity.

EP understands the important role that Royal Mail and GLS play in their markets and is committed to being a responsible steward of IDS through the next stage of its evolution and, as described in more detail below, intends to support IDS management in implementing their strategy.

IDS comprises two businesses:

·    Royal Mail - the UK-based operation which is the UK's sole designated Universal Service Provider. As set out in section 6 (Background to and reasons for the Acquisition), EP is highly cognisant of Royal Mail's unique heritage and responsibilities as the designated Universal Service Provider in the United Kingdom serving as a key part of national infrastructure, and the need to secure Royal Mail's long-term future, pursue long-term growth, continue to improve its customer offering and continue a collaborative relationship with its employees and trade unions; and

·    GLS - the international operation, offering parcel, freight, logistics and express services throughout Europe as well as in the U.S. and Canada. EP believes in the continued growth of the GLS business. EP considers GLS one of the most successful companies in the cross-border deferred segment in Europe and acknowledges it has an emerging position in North America, with the potential to grow its position.

As is consistent with market practice, prior to this announcement Bidco has been granted access to IDS' senior management for the purposes of confirmatory due diligence. Following completion of the Acquisition, Bidco intends to work with the current IDS management team to further develop its strategic plans via an in-depth evaluation of the IDS Group. Bidco expects that the evaluation will be completed within approximately 9 months following completion of the Acquisition. The evaluation will include:

·    assessing opportunities to further accelerate and enhance the existing modernisation agenda for Royal Mail (as noted above, Bidco is supportive of IDS' current modernisation strategy);

·    engaging with employee representatives (including the CWU and CMA Unite), management and Ofcom;

·    assessing potential targeted M&A / acquisitions; and

·    assessing opportunities to accelerate potential investments that will support the necessary improvements to Royal Mail and support IDS to improve quality and the long-term growth and margin expansion of GLS: for example, through investment in out-of-home solutions across the Royal Mail and GLS coverage network.

Bidco does not intend to divest the GLS business from the IDS Group. Bidco views both Royal Mail and GLS as businesses with solid foundations and potential, however, both businesses require additional investment in the mid-term horizon to realise such potential. As noted in section 6 (Background to and reasons for the Acquisition), Bidco's main goal is to develop IDS into one of the leading postal logistics groups in Europe, subject to successful transformation and investments in modernisation (including USO reform) and out-of-home solutions. Bidco intends to re-invest any potential savings or profits generated by GLS and Royal Mail following the implementation of any changes to the USO into the future growth of both Royal Mail and GLS.

For further information regarding the undertakings that Bidco and EP have made in respect of GLS please see section 4 (Undertakings to the UK Government) above.

Bidco intends for Royal Mail and GLS to continue operating as standalone businesses within IDS, with the head offices and head office functions remaining in London and Amsterdam, led by the current IDS, Royal Mail and GLS executive management teams.

EP recognises the importance of financial prudence with regards to the capital structure of Bidco. The financing of the Acquisition is structured so that the investment grade credit rating of IDS is expected to be maintained. Following completion of the Acquisition, IDS is expected to be considered a highly strategic subsidiary of EP by the relevant ratings agencies. It is EP's intention to elevate IDS to a core subsidiary of EP, meaning that the rating of IDS would not be lower than the rating of EP, allowing IDS to benefit from being part of a group with an extensive portfolio of significant industrial assets with a long-term investment grade rating profile. EP takes a conservative approach to its capital structure and intends to continue operating EP on the basis that its current investment grade rating profile is maintained.

The Royal Mail name and brand

EP recognises the importance of the IDS business to its stakeholders, particularly in the UK where Royal Mail is the country's sole designated Universal Service Provider. Bidco will maintain and protect the iconic Royal Mail name and use of the Royal Cypher.

For further information regarding the undertakings that Bidco and EP have made in respect of the Royal Mail name, brand and use of Royal Cypher, please see section 4 (Undertakings to the UK Government) above.

Commitment to the Universal Service Obligation (the "USO")

Bidco respects and is fully committed to the USO and is fully supportive of Royal Mail's submission to Ofcom in response to the call for evidence on the reform of the USO. Royal Mail's proposal to reform the USO contemplates, amongst other things, the continued delivery of a one-price-goes-anywhere universal service throughout the whole of the United Kingdom and a choice of First and Second Class services, with First Class letters still delivered six days a week. Following completion of the Acquisition, Bidco intends to explore, with Ofcom and the UK Government, this approach to delivering the universal service on a sustainable basis.

For further information regarding the undertakings and commitments that Bidco and EP have made in respect of the USO, please see sections 4 (Undertakings to the UK Government) and 5 (Contractual commitments) above.

Trade unions and the Business Recovery, Transformation and Growth agreement

Bidco fully respects the Business Recovery, Transformation and Growth agreement reached in 2023 between Royal Mail and the CWU and, following completion of the Acquisition, intends to abide by and comply with the terms of the agreement and with Royal Mail's agreements with CMA Unite. Bidco notes that under the terms of the agreement, Royal Mail has made certain employee commitments (including, no compulsory redundancies) until April 2025.  Following completion of the Acquisition, Bidco intends to discuss and negotiate in good faith with the CWU in respect of the potential extension of these protections and, at the appropriate time, Bidco intends to enter into pay deal discussions with Royal Mail's unions in good faith. 

Bidco sees cooperation with both trade unions, the CWU and CMA Unite, as crucial for the future of Royal Mail and following completion of the Acquisition intends to engage in further discussions with both partners regarding the future operation of the Royal Mail business as well as with GLS' unions and works councils regarding the future operation of the GLS business.

For further information regarding the undertakings that Bidco and EP have made in respect of CWU and CMA Unite, please see section 4 (Undertakings to the UK Government) above.

Employees

Bidco attaches great importance to the skills and experience of the IDS Group's employees and recognises that the employees and management of IDS will be key to the continued success of the IDS Group.

Bidco does not intend to make any material changes to IDS' overall headcount and does not intend to make any reductions in the number of front-line workers, other than any reduction in headcount arising from and consistent with the headcount numbers announced by management of IDS in connection with management's existing strategy or Royal Mail's proposals for the reform of the USO as further described in section 8 (Background to and reasons for the recommendation) above.

Further, it is expected that once IDS ceases to be a listed company, a limited number of listed company-related functions are likely to, subject to any required information and consultation with any impacted employees and/or their representatives in accordance with applicable law, be reduced in scope or become unnecessary. Bidco confirms that its intention is for any individuals impacted to be treated in a manner consistent with IDS' high standards, culture and practices.

Bidco does not anticipate any material change in the balance of skills and functions of the employees and management of the IDS Group.

For further information regarding the contractual commitments that Bidco and EP have made in respect of the employees of the IDS Group, please see section 5 (Contractual commitments) above.

Existing employment rights and pensions 

Bidco confirms that, following completion of the Acquisition, the existing contractual and statutory employment rights, including pension rights, of all IDS management and employees will be fully safeguarded in accordance with applicable law.

Royal Mail currently makes contributions to one defined benefit arrangement in the UK, the Defined Benefit Cash Balance Section of the Royal Mail Pension Plan (the "DBCBS"), and the majority of defined contribution benefit accrual is under one defined contribution arrangement, the RMDCP. Other than in relation to closing the RMDCP and the DBCBS to accrual in connection with the implementation of the RMCPP (as defined blow), Bidco does not intend to make any changes to the benefits provided by the RMDCP or the DBCBS.

The IDS Group also operates an additional UK defined benefit scheme which is closed to future accrual, the legacy section of the Royal Mail Pension Plan (the "RMPP" and such section, the "Pre-2018 Section"). Bidco does not intend to make any changes to the current employer pension contribution arrangements, the accrual of benefits for existing members or the rights of admission of new members under the Pre-2018 Section. Bidco also intends that, following completion of the Acquisition, it will continue to comply with IDS' obligations in respect of the Pre-2018 Section and, subject to changes made in connection with the implementation of the RMCPP (as defined below), the DBCBS, including the payment of contributions (which is intended to continue in line with current arrangements and applicable law, as varied by agreement with the trustee of the RMPP from time to time), and to work constructively with the trustee.

Bidco notes Royal Mail's intention to introduce a new pension scheme, the RMCPP, which will replace the existing DBCBS and RMDCP for future accrual and will comprise a Defined Benefit Lump Sum Section (the "DBLS") and a Collective Defined Contribution (the "CDC") Section. Bidco understands that Royal Mail plans to launch the RMCPP fully in October 2024. Following the full launch of the RMCPP, accrual under the RMDCP (other than for existing members with less than a year's service, who would be permitted to continue accrual until they reach one year's service in RMDCP) and DBCBS is intended to cease and accrual in the RMCPP's CDC and DBLS Sections is intended to commence.

If the RMCPP has not fully launched by the time the Acquisition completes, Bidco (i) intends for the relevant employers in the IDS Group to continue to comply with their obligations to pay contributions to the DBCBS and the RMDCP in respect of continuing accrual and in line with current arrangements, until they are closed to accrual, and (ii) intends to continue to work with Royal Mail and the trustee of the RMCPP to launch the RMCPP as soon as reasonably practicable thereafter.

Bidco notes that the IDS Group formerly operated the Royal Mail Senior Executives Pension Plan, another UK defined benefit scheme, which was formally wound up on 29 April 2024.

For further information regarding the contractual commitments that Bidco and EP have made in respect of the pension arrangements of the IDS Group, please see sections 4 (Undertakings to the UK Government) and 5 (Contractual commitments) above.

Board and management

Bidco intends that the current executive members of the IDS Board will continue to lead IDS following completion of the Acquisition. Martin Seidenberg, the Chief Executive Officer of the IDS Group, and Michael Snape, the Chief Financial Officer of the IDS Group, will continue in their roles.

Shortly following completion of the Acquisition, each of the non-executive members of the IDS Board shall resign from his or her office as a director of IDS. Bidco intends to appoint a certain number of its representatives as non-executive members of the IDS Board.

Bidco intends to put in place a new board of directors of Royal Mail following completion of the Acquisition, which will include at least two independent non-executive directors. The Royal Mail board will have a particular focus on governance for Royal Mail and its delivery of the universal service to customers.

For further information regarding the undertakings that Bidco and EP have made in respect of the governance arrangements in respect of Royal Mail following completion of the Acquisition please see section 4 (Undertakings to the UK Government) above.

Management incentive arrangements

Following completion of the Acquisition, Bidco intends to review the management, governance and incentive structure of IDS. Bidco has not entered into, and has not had discussions on proposals to enter into, any form of incentivisation arrangements with members of IDS' management, but may have discussions and enter into such arrangements for certain members of the IDS management team following completion of the Acquisition.

Headquarters, locations, fixed assets and research and development

Following completion of the Acquisition, Bidco intends that IDS will continue to operate as a standalone business group. As noted above, Bidco has no plans to undertake any material restructurings or changes to the locations of IDS' material fixed assets or material places of business. Bidco also has no plans to change the location or functions of IDS' headquarters, other than in respect of the listed company-related functions as described above.

Bidco is supportive of management's programme to manage its freehold real estate assets proactively and efficiently. IDS has, over many decades, disposed of a number of freehold properties pursuant to the management's programme. Following completion of the Acquisition, Bidco will engage with IDS management to better understand the current status of the freehold estate and the future needs of the Royal Mail and GLS businesses and, subject to the outcome of such engagement, intends to continue to optimise the real estate assets consistent with IDS' strategy.

IDS does not have any material research and development operations or functions and Bidco does not intend to change this position.

Sustainability

Bidco fully supports IDS' existing commitments to reduce its environmental impact. Bidco intends to continue the modernisation and electrification of the IDS fleet and to reduce estate and value chain emissions, with the aim for Royal Mail to reach Net Zero by 2040 and GLS to reduce CO2 emissions to zero by 2045.

Trading Facilities

IDS Shares are currently listed on the Official List and admitted to trading on the London Stock Exchange. As set out in section 18 (Offer process), assuming at least 75% of IDS Shares are acquired pursuant to the Offer, applications will be made for the cancellation of the listing of IDS Shares on the Official List and the cancellation of trading of IDS Shares on the London Stock Exchange, and steps will be taken to re-register IDS as a private company.

None of the statements in this section 16 are "post-offer undertakings" for the purposes of Rule 19.5 of the Takeover Code.

17        IDS Share plans

Participants in the IDS Share Plans will be contacted regarding the effect of the Acquisition on their awards under the IDS Share Plans and, to the extent required, an appropriate proposal will be made to such participants which reflects their awards under the IDS Share Plans in due course. Details of the impact of the Offer on each of the IDS Share Plans and any proposals will be set out in the Offer Document.

18        Offer process

It is intended that the Acquisition will be implemented by way of a takeover offer for the purposes of Part 28 of the 2006 Act (although Bidco reserves the right to effect the Acquisition by way of a Scheme, subject to the consent of the Panel and the consent of IDS in accordance with the terms of the Cooperation Agreement).

Bidco will make the Offer through the despatch of the Offer Document and Form of Acceptance, both of which will be posted to IDS Shareholders (or made available electronically in accordance with the Takeover Code) no later than 28 days after the date of this announcement (unless agreed otherwise with the Panel). The Offer Document will contain the formal terms of, and Conditions applicable to, the Offer.

The Acquisition is subject to the Conditions and certain further terms referred to in Appendix 1 to this announcement and to the full terms and conditions to be set out in the Offer Document (or, if the Acquisition is implemented by way of a Scheme, the Scheme Document).

In particular, the Offer will be conditional on, among other things, valid acceptances being received (and not validly withdrawn) by not later than 1.00 p.m. (London time) on the Unconditional Date (or such later time(s) and/or date(s) as Bidco may, with the consent of the Panel, decide) in respect of such number of IDS Shares as shall, when aggregated with both (i) any IDS Shares acquired or unconditionally agreed to be acquired (whether pursuant to the Offer or otherwise) and (ii) any IDS Shares acquired or agreed to be acquired under the VESA SPA by Bidco, represent IDS Shares carrying not less than 75% of the voting rights then normally exercisable at a general meeting of IDS Shareholders (or such lower percentage as Bidco may, with the consent of IDS, decide, provided that Bidco shall hold or have acquired or agreed to acquire (whether pursuant to the Offer, the VESA SPA or otherwise), directly or indirectly, IDS Shares carrying in aggregate more than 50% of the voting rights then normally exercisable at a general meeting of IDS Shareholders) (the "Acceptance Condition"). Unless the Panel agrees otherwise, the Acceptance Condition shall only be capable of being satisfied when all other Conditions have been satisfied or waived.

Save as may otherwise be required by the Panel, the Offer shall not proceed, shall lapse or shall be withdrawn on the Long Stop Date if:

·    sufficient acceptances have not been received so as to enable the Acceptance Condition to be satisfied; or

·    where sufficient acceptances have been received so as to enable the Acceptance Condition to be satisfied, if a Condition relating to an official authorisation or regulatory clearance has not been satisfied or waived and the Panel consents to the Offer not proceeding, lapsing or being withdrawn.

The Acquisition is currently expected to complete during the first quarter of 2025, subject to the satisfaction or (where applicable) waiver of the Conditions. An expected timetable of key events relating to the Acquisition will be set out in the Offer Document.

19    Delisting, cancellation of trading, Re-Registration and compulsory acquisition

If the Offer becomes or is declared unconditional and if Bidco has, by virtue of the IDS Shares it holds, if any, and the IDS Shares it has contracted to acquire, whether by way of acceptances of the Offer, the VESA SPA or otherwise, acquired or agreed to acquire issued share capital carrying 75% or more of the voting rights of IDS (or the appropriate special resolutions are otherwise passed), it is intended that Bidco shall procure that IDS makes a request to the FCA to cancel the listing of IDS Shares from the Official List and makes an application to the London Stock Exchange for the cancellation of the admission to trading of IDS Shares on the Main Market.

It is anticipated that, subject to any applicable requirements of the London Stock Exchange, cancellation of admission to trading of IDS Shares on the Main Market shall take effect no earlier than the date that is 20 business days (as defined in the UK Listing Rules) after the date on which Bidco has announced that it has acquired or agreed to acquire 75% of the voting rights attaching to the IDS Shares.

The cancellation of the listing would significantly reduce the liquidity and marketability of any IDS Shares not assented to the Offer at that time.

If Bidco receives acceptances under the Offer in respect of, and/or otherwise acquires, 90% or more of the IDS Shares to which the Offer relates, Bidco intends to exercise its rights pursuant to the provisions of Chapter 3 of Part 28 of the 2006 Act to acquire compulsorily any IDS Shares not acquired or agreed to be acquired by or on behalf of Bidco pursuant to the Offer or otherwise on the same terms as the Offer.

20        Documents

Copies of the following documents will be available promptly on IDS' website, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, at www.internationaldistributionservices.com and in any event by no later than noon on the Business Day following this announcement:

·    this announcement;

·    the Confidentiality Agreement;

·    the Clean Team Agreement;

·    the Confidentiality and Joint Defence Agreement;

·    the Cooperation Agreement;

·    the VESA SPA;

·    the irrevocable undertakings referred to in section 11 (Irrevocable Undertakings) above and summarised in Appendix 3 to this announcement;

·    the Interim Facilities Agreement and such other documents entered into for the financing of the Acquisition pursuant to or in connection with the Interim Facilities Agreement; and

·    the consent letters from financial advisers to being named in this announcement.

Neither the content of the websites referred to in this announcement, nor any website accessible from any hyperlinks set out in this announcement, is incorporated into or forms part of this announcement.

21        General

Bidco reserves the right to elect (with the consent of the Panel and the consent of IDS in accordance with the terms of the Cooperation Agreement) to implement the Acquisition by way of a Scheme as an alternative to the Offer. In such event, the Scheme will be implemented on substantially the same terms, so far as applicable, as those which would apply to the Offer.

Investors should be aware that Bidco may purchase IDS Shares otherwise than under the Offer or any Scheme, including pursuant to privately negotiated purchases.

BNP Paribas, Citi and J.P. Morgan (as financial advisers to Bidco) and Barclays, BofA Securities and Goldman Sachs (as financial advisers to IDS) have each given and not withdrawn their consent to the publication of this announcement with the inclusion herein of the references to their names in the form and context in which they appear.

This announcement does not constitute an offer or an invitation to purchase or subscribe for any securities.

The Acquisition will be on the terms and subject to the conditions set out herein and in Appendix 1, and to be set out in the Offer Document.  The sources and bases for certain financial information contained in this announcement are set out in Appendix 2. Details of the irrevocable undertakings received by Bidco are set out in Appendix 3. Certain definitions and terms used in this announcement are set out in Appendix 4. The formal Offer Document will be sent to shareholders of IDS within 28 days of this announcement (or on such later date as may be agreed with IDS and the Panel).

Enquiries

Kirkland & Ellis International LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are acting as legal advisers to Bidco, EP and J&T.

Slaughter and May is acting as legal adviser to IDS.

Further information

BNP Paribas is authorised and regulated by the European Central Bank and the Autorité de Contrôle Prudentiel et de Résolution. BNP Paribas is authorised by the Prudential Regulation Authority and is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. BNP Paribas has its registered office at 16 Boulevard des Italiens, 75009 Paris, France and is registered with the Companies Registry of Paris under number 662 042 449 RCS and has ADEME identification number FR200182_03KLJ. BNP Paribas London Branch is registered in the UK under number FC13447 and UK establishment number BR000170, and its UK establishment office address is 10 Harewood Avenue, London NW1 6AA. BNP Paribas is acting as financial adviser exclusively for EP, J&T and Bidco and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than EP, J&T or Bidco for providing the protections afforded to clients of BNP Paribas or for providing advice in relation to the matters described in this announcement or any transaction or arrangement referred to herein.

Citigroup Global Markets Europe AG, which is regulated by the European Central Bank and the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht - BaFin) and Bundesbank, ("Citi") is acting as financial adviser for EP, J&T and Bidco and for no one else in connection with the matters described in this announcement and the Acquisition and will not be responsible to anyone other than EP, J&T and Bidco for providing the protections afforded to clients of Citi nor for providing advice in connection with the Acquisition, or any other matters referred to in this announcement. Neither Citi nor any of its affiliates, directors or employees owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, consequential, whether in contract, in tort, in delict, under statute or otherwise) to any person who is not a client of Citi in connection with this announcement, any statement contained herein, the Acquisition or otherwise.

J.P.  Morgan SE, together with its affiliate J.P. Morgan Securities  plc,  which  conducts  its  UK  investment  banking  business  as  J.P.  Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised in the United Kingdom by the PRA and regulated in the United Kingdom by the PRA and the FCA (together, "J.P. Morgan"). J.P. Morgan is acting as financial adviser exclusively to EP, J&T and Bidco and no one else in connection with the Acquisition and will not regard any other person as its client in relation to the Acquisition and will not be responsible to anyone other than EP, J&T or Bidco for providing the protections afforded to clients of J.P. Morgan or its affiliates, nor for providing advice in relation to the Acquisition or any other matter or arrangement referred to herein.

Barclays Bank PLC, acting through its Investment Bank ("Barclays"), which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for IDS and no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than IDS for providing the protections afforded to clients of Barclays nor for providing advice in relation to the subject matter of this announcement. In accordance with the Takeover Code, normal United Kingdom market practice and Rule 14e-5(b) of the U.S. Exchange Act, Barclays and its affiliates will continue to act as exempt principal traders in IDS securities on the London Stock Exchange. These purchases and activities by exempt principal traders which are required to be made public in the United Kingdom pursuant to the Takeover Code will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com. This information will also be publicly disclosed in the United States to the extent that such information is made public in the United Kingdom.

Merrill Lynch International ("BofA Securities"), which is authorised by the UK Prudential Regulatory Authority and regulated by the UK Financial Conduct Authority and the UK Prudential Regulatory Authority, is acting exclusively for IDS and for no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than IDS for providing the protections afforded to its clients or for providing advice in relation to the matters referred to in this announcement.

Goldman Sachs International ("Goldman Sachs"), which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting exclusively for IDS and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than IDS for providing the protections afforded to clients of Goldman Sachs International, or for providing advice in relation to the matters referred to in this announcement.

This announcement is for information purposes only and is not intended to, and does not, constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities of IDS in any jurisdiction in contravention of applicable law.  The Acquisition will be implemented solely pursuant to the terms of the Offer Document (or, if the Acquisition is implemented by way of a Scheme, the Scheme Document) which will contain the full terms and conditions of the Acquisition, including details of how to accept the Offer.  Any decision or response in relation to the Acquisition, or if the Acquisition is implemented by way of a Scheme, any vote in respect of the Scheme should be made only on the basis of the information contained in the Offer Document (or, if the Acquisition is implemented by way of a Scheme, the Scheme Document).

Bidco and IDS will prepare the Offer Document (or, if the Acquisition is implemented by way of a Scheme, the Scheme Document) to be distributed to IDS Shareholders. Bidco and IDS urge IDS Shareholders to read the Offer Document (or Scheme Document, as applicable) when it becomes available because it will contain important information relating to the Acquisition.

The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and publication of this announcement shall not give rise to any implication that there has been no change in the facts set forth in this announcement since such date.

This announcement does not constitute or form part of, and should not be construed as, any public offer under any applicable legislation or an offer to sell or solicitation of any offer to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments.

This announcement does not constitute a prospectus, prospectus equivalent document or exempted document.

This announcement contains inside information in relation to IDS for the purposes of Article 7 of the Market Abuse Regulation. IDS' Legal Entity Identifier is 213800TCZZU84G8Z2M70. The person responsible for arranging release of this announcement on behalf of IDS is Mark Amsden, Company Secretary.

If you are in any doubt about the contents of this announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

Overseas Shareholders

The release, publication or distribution of this announcement in, into or from jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK should inform themselves of, and observe, any applicable legal or regulatory requirements.  Any failure to comply with such requirements may constitute a violation of the securities laws of any such jurisdiction.  To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. This announcement has been prepared in accordance with and for the purpose of complying with English law, the Takeover Code, the Market Abuse Regulation and the Disclosure Guidance and Transparency Rules and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.

The availability of the Acquisition to IDS Shareholders who are not resident in and citizens of the UK may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens.  Persons who are not resident in the UK should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions.  Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction.  To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person.  Further details in relation to Overseas Shareholders will be contained in the Offer Document (or, if the Acquisition is implemented by way of a Scheme, the Scheme Document).

Unless otherwise determined by Bidco or required by the Takeover Code, and permitted by applicable law and regulation, the Acquisition will not be made available, in whole or in part, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may accept the Offer by any such use, means, instrumentality or from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction.  Copies of this announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including, without limitation, agents, custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in or into or from any Restricted Jurisdiction.  Doing so may render invalid any related purported acceptance of the Offer.  Unless otherwise permitted by applicable law and regulation, the Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.

Further details in relation to Overseas Shareholders will be included in the Offer Document (or, if the Acquisition is implemented by way of a Scheme, the Scheme Document) and IDS Shareholders are advised to read carefully the Offer Document (or Scheme Document, as applicable) once it has been mailed.

The Acquisition will be subject to English law, the applicable requirements of the 2006 Act, the Takeover Code, the Panel, the FCA and the London Stock Exchange and applicable securities law.

Notice to U.S. IDS Shareholders

The Acquisition relates to the shares of an English company with a listing on the London Stock Exchange and is being made by means of a takeover offer. A transaction effected by means of a takeover offer or, if the Acquisition is to be implemented by means of a Scheme, a scheme of arrangement, is not subject to the tender offer or proxy solicitation rules under the U.S. Securities Exchange Act of 1934 (the "U.S. Exchange Act").  Accordingly, the Acquisition is subject to the disclosure requirements and practices applicable in the UK to takeover offers and schemes of arrangement which differ from the disclosure requirements of the U.S. tender offer and proxy solicitation rules. The financial information included in this announcement has been prepared in accordance with generally accepted accounting principles of the United Kingdom and thus may not be comparable to financial information of U.S. companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

If, in the future, Bidco exercises its right to implement the Acquisition by way of a Scheme, which is to be made into the United States, such Scheme will be made in compliance with the applicable U.S. laws and regulations.

It may be difficult for U.S. holders of IDS Shares to enforce their rights and any claim arising out of the U.S. federal laws, since Bidco and IDS are located in a non-U.S. jurisdiction, and some or all of their officers and directors may be residents of a non-U.S. jurisdiction.  U.S. holders of IDS Shares may not be able to sue a non-U.S. company or its officers or directors in a non-U.S. court for violations of the U.S. securities laws.  Further, it may be difficult to compel a non-U.S. company and its affiliates to subject themselves to a U.S. court's judgement.

Financial information relating to IDS included in this announcement and the Offer Document has been or will have been prepared in accordance with accounting standards applicable in the United Kingdom that may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with US GAAP. US GAAP differs in certain significant respects from accounting standards applicable in the United Kingdom. None of the financial information relating to IDS in this announcement has been audited in accordance with auditing standards generally accepted in the United States or the auditing standards of the Public Company Accounting Oversight Board (United States).

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the U.S. Exchange Act, EP, J&T or their nominees, or their brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, IDS Shares outside of the U.S., other than pursuant to the Acquisition, until the date on which completion of the Acquisition occurs, lapses or is otherwise withdrawn. Also, in accordance with Rule 14e-5(b) of the U.S. Exchange Act, BNP Paribas, Citigroup Global Markets Limited and J.P. Morgan will continue to act as exempt principal traders in IDS shares on the London Stock Exchange. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices.  Any information about such purchases will be disclosed as required in the United Kingdom, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website, www.londonstockexchange.com.

Forward Looking Statements

This announcement (including information incorporated by reference in this announcement), statements made regarding the Acquisition, and other information published by Bidco and IDS contain statements which are, or may be deemed to be, "forward-looking statements".  Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Bidco and IDS about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.

The forward-looking statements contained in this announcement include statements with respect to the final condition, results of operations and business of IDS and relating to the expected effects of the Acquisition on Bidco and IDS (including their future prospects, developments and strategies), the expected timing and scope of the Acquisition and other statements other than historical facts.  Often, but not always, forward-looking statements can be identified by the fact that they do not relate only to historical or current facts and by the use of forward-looking words such as "prepares", "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "projects", "synergy", "strategy", "scheduled", "goal", "estimates", "forecasts", "cost-saving", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved.  Forward looking statements may include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Bidco's, IDS', any member of the Bidco Group's or any member of the IDS Group's operations and potential synergies resulting from the Acquisition; and (iii) the effects of global economic conditions and governmental regulation on Bidco's, IDS', any member of the Bidco Group's or any member of the IDS Group's business.

Although Bidco and IDS believe that the expectations reflected in such forward-looking statements are reasonable, Bidco and IDS can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve known and unknown risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could be beyond the control of EP and/or IDS which may cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements.

These factors include, but are not limited to: the ability to complete the Acquisition; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other Conditions on the proposed terms and schedule; changes in the global political, economic, business and competitive environments and in market and regulatory forces; changes in future exchange and interest rates; changes in tax rates; future business combinations or disposals; changes in general economic and business conditions; changes in the behaviour of other market participants; changes in the anticipated benefits from the Acquisition not being realised as a result of changes in general economic and market conditions in the countries in which Bidco and IDS operate, weak, volatile or illiquid capital and/or credit markets, changes in tax rates, interest rate and currency value fluctuations, the degree of competition in the geographic and business areas in which Bidco and IDS operate and changes in laws or in supervisory expectations or requirements. Other unknown or unpredictable factors could cause actual results to differ materially from those expected, estimated or projected in the forward-looking statements.  If any one or more of these risks or uncertainties materialises or if any one or more of the assumptions proves incorrect, actual results may differ materially from those expected, estimated or projected. Such forward-looking statements should therefore be construed in the light of such factors.  Neither Bidco nor IDS, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur.  You are cautioned not to place any reliance on these forward-looking statements. 

Specifically, statements of estimated cost savings and synergies related to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, the cost savings and synergies, if referred to, may not be achieved, may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated. Due to the scale of the IDS Group, there may be additional changes to the IDS Group's operations. As a result, and given the fact that the changes relate to the future, the resulting cost synergies may be materially greater or less than those estimated.

Other than in accordance with their legal or regulatory obligations, neither Bidco nor IDS is under any obligation, and Bidco and IDS expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Dealing and Opening Position Disclosure Requirements

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Takeover Code applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on a website

In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement and the documents required to be published under Rule 26 of the Takeover Code will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on IDS' website at www.internationaldistributionservices.com by no later than 12 noon (London time) on the Business Day following this announcement.  For the avoidance of doubt, neither the content of this website nor of any website accessible from any hyperlinks set out in this announcement are incorporated by reference or form part of this announcement.

No profit forecasts, estimates or quantified benefits statements

No statement in this announcement is intended as a profit forecast, profit estimate or quantified benefits statement for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share for IDS for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for IDS.

General

Bidco reserves the right to elect to implement the Acquisition by way of a Scheme as an alternative to the Offer, subject to the Panel's consent and the consent of IDS in accordance with the terms of the Cooperation Agreement. In such event, such Scheme will be implemented on substantially the same terms and conditions, so far as applicable, as those which would apply to the Offer (subject to appropriate amendments).

Investors should be aware that Bidco may purchase IDS Shares otherwise than under any Scheme or the Offer, including pursuant to privately negotiated purchases.

Requesting hard copy documents

In accordance with Rule 30.3 of the Takeover Code, IDS Shareholders, persons with information rights and participants in IDS Share Plans may request a hard copy of this announcement by contacting IDS' registrars, Equiniti, during business hours on +44 (0) 371 384 2426, or by submitting a request in writing to Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, United Kingdom. If calling from outside of the UK, please ensure the country code is used. For persons who receive a copy of this announcement in electronic form or via a website notification, a hard copy of this announcement will not be sent unless so requested.  Such persons may also request that all future documents, announcements and information to be sent to them in relation to the Acquisition should be in hard copy form.

Electronic Communications

Please be aware that addresses, electronic addresses and certain other information provided by IDS Shareholders, persons with information rights and other relevant persons for the receipt of communications from IDS may be provided to Bidco during the offer period as required under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover Code.

Rounding

Certain figures included in this announcement have been subjected to rounding adjustments.  Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of figures that precede them.

Disclaimer

The Acquisition will be subject to English law, the applicable requirements of the 2006 Act, the Takeover Code, the Panel, the FCA and the London Stock Exchange and applicable securities law.