Czech billionaire allowed to raid Royal Mail

The billionaire known as the “Czech Sphinx” has been given the go-ahead to tighten his grip on Royal Mail and even make a full-fledged takeover bid.

Daniel Kretinski controls 22 percent of parent company Royal Mail International Distributions Services (IDS) through his Vesa Equity vehicle.

In August, then-affairs minister Kwasi Kwarteng launched a national security review after the tycoon decided to increase his stake in the company to more than 25 percent.

But IDS said current business secretary Grant Shapps said “no further action” would be taken against Kretinski if he increased his stake.

This effectively clears the way for the billionaire to increase his investment in the parcel carrier – or even launch a takeover.

Shares in IDS jumped 5.8 percent, or 11.3p, to 205.1p on the news.

The meeting will be a welcome respite for the company, which last month changed its name to IDS and threatened to split the business in two, throwing Royal Mail’s future into doubt even before Shapps’ decision.

While international parcel delivery arm Global Logistics Services (GLS) is thriving, Royal Mail’s UK business is embroiled in a bitter union dispute and is losing £1m a day.

Kretinsky has previously hinted that he may increase his stake in the company above 25 percent, which would require him to inform the markets.

Under City rules, the tycoon will be required to make a takeover bid if his stake rises to 30 percent.

Analysts at broker Peel Hunt said the news was “clearly positive” for IDS, but it remains to be seen whether Kretinsky will increase his stake in the group.

Meanwhile, Liberum said the decision removed a “potential lock-in from IDS being acquired”, which would support the share price in the short term, despite the “significant structural challenges” facing Royal Mail.

Kretinski, who made his fortune through infrastructure and energy assets in Central and Eastern Europe, has invested in other British companies, including supermarket chain Sainsbury’s, and owns a 27 percent stake in Premier League football club West Ham United.

Sphinx with a view of energy and football

Anna Kellnerova, Kretinsky’s girlfriend

Daniel Kretinsky earned the nickname “Czech Sphinx” due to his unfathomable approach to investing.

The 47-year-old, who was born in the city of Brno, is estimated to be worth £4.3 billion.

He made most of his money buying Czech power plants and owns Energeticky A Prumyslovy Holding (EPH), the largest energy group in Central Europe.

Kretinski also owns stakes in US department store chain Macy’s, footwear group Foot Locker, French newspaper Le Monde, German retailer Metro and Dutch postal company PostNL.

An avid sports fan, he co-owns the Czech football team “Sparta Prague”, has a stake in “West Ham United” and is also interested in investing in real estate.

It was reported in September that he had bought the Château du Marais, a castle south-west of Paris, for £37m and plans to turn it into a luxury hotel complex.

Kretinski also owns Heath Hall, a £65m mansion in Hampstead, London.

Kretinsky’s girlfriend is Anna Kellnerova (pictured), a 25-year-old Czech show jumper who competed in the 2020 Tokyo Games.

Alex Irving, an analyst at Bernstein, said it was “unclear” what Kretinsky’s end game is for IDS, but admitted there was “nothing stopping him” from buying it.

Meanwhile, AJ Bell’s Russ Mold said the billionaire was likely to be more interested in GLS, the company’s more profitable international arm, than in the troubled Royal Mail business.

“Royal Mail continues to be plagued by competition and industry turmoil – it continues to be unprofitable and a cash grab,” Mold said, adding that any foreign takeover would “probably” be blocked by the government.

“The GLS, however, is a completely different matter,” he said.

“It is profitable and although rising fuel costs and other costs will be a challenge, it appears to be better able to handle them than Royal Mail.

“Any breakup of IDS could give Mr. Kretinski a chance to pick this asset.”

The rise in IDS’s share price also came as the Communications Workers Union (CWU), which represents around 115,000 Royal Mail staff, called off strikes that had been planned for the next two weeks following a legal challenge by the company.

The CWU said on Sunday it had canceled planned walkouts from November 2 to 10, although strikes would resume on November 12. Royal Mail and the CWU are at loggerheads over pay.