Vince Cable warns against bid by the ‘Czech Sphinx’ for Royal Mail

Sunday 15 December 2024 3:01 pm

Former business secretary Vince Cable has warned the Government not to wave through the sale of the Royal Mail to Czech tycoon Daniel Kretinsky, citing his links to Russia and the high amount of debt involved.

Cable was the architect of the privatisation of the postal service in 2013, overseeing a £3.3bn deal which led to its listing on the London Stock Exchange.

“It is very sensible to be concerned about Kretinsky’s bid,’ Cable told The Mail on Sunday. ‘The debt-fuelled offer and his Russian connections should give Ministers pause for thought.”

Billionaire Kretinsky – who has been dubbed the ‘Czech Spinx‘ – owns EP Group, which made its £3.6bn, debt-fulled bid for the postal service earlier this year. If the deal goes through, it will be the first the company has been in foreign hands in its 508-year history.

The deal was always going to face heightened scrutiny given Royal Mail’s responsibility for a critical part of UK infrastructure and the bidder not being British, with debates over aspects of the deal raging throughout the year.

Kretinsky has already made a series of commitments to reassure the government with ‘safeguards’ on job losses, UK tax residency and keeping the Royal Mail brand.

He has also said he will pursue the same universal service obligation (USO) reforms that Royal Mail is chasing in order to modernise its services, which it says are currently unsustainable.

Some analysts have said the deal could get hung up by regulatory barriers, while others think it may be in the government’s best interests to wave it through.

Royal Mail’s losses narrowed to £348m in 2024, up from £419m the prior year, but IDS missed consensus forecasts and, as a result of the offer period, it gave no guidance on outlook. Liberium analysts said: “We saw little to be encouraged about.”

The London-listed stock has risen nearly 30 per cent this year.

City AM has contacted the Department for Business and Trade and EP Group for comment.