BBC: Royal Mail buyer to make offer for all staff shares

[Basildon Bond]

Simon Jack | BBC Business editor | Published 7 hours ago

https://www.bbc.co.uk/news/articles/ce993qynp25o

More than 100,000 former and current Royal Mail staff will this week be asked to sell their shares to a Czech billionaire.

On Wednesday morning, Daniel Kretinsky’s investment group, which wants to buy Royal Mail's parent company, will publish its formal offer online and send it by post.

Mr Kretinsky can then formally start lobbying investors to accept the offer.

He needs the approval of shareholders of three quarters of the parent company, but this task will be made easier because he already owns 27.5% of it.

Big asset managers including Blackrock, UBS, Vanguard and Schroders own most of the other 72.5% of International Distribution Services (IDS) that Mr Kretinsky does not own.

Meanwhile, Royal Mail staff still collectively own 5.5% of the shares after qualifying staff received 600 shares in the company at the time of its privatisation in 2013.

Mr Kretinsky made his fortune in energy companies. He also has stakes in Sainsbury's and West Ham Football Club.

The board of IDS has already recommended that shareholders big and small accept his offer of 370p per share.

This is more than the 319p it is currently trading at and substantially above the 220p it was worth before Mr Kretinsky’s first offer to buy the company.

However, the government still has the ability to block this deal, which it may do given Royal Mail's importance to the UK.

Mr Kretinsky’s EP Group has offered a series of time limited guarantees including the retention of the Royal Mail logo, its UK headquarters, and its UK tax base.

It also offered to honour current employment agreements with unions and promised not to split off the profitable parcels business, which IDS also owns.

Chancellor Jeremy Hunt has said that the deal would be subject to the normal scrutiny but he was not opposed “in principle”.

Shadow Business Secretary Jonathan Reynolds has written to Mr Kretinsky to seek assurances that Royal Mail will remain headquartered and tax-resident in the UK.

My Reynolds also wants a commitment from Mr Kretinsky to “work closely with the Communication Workers Union (CWU) to build a sustainable Royal Mail".

The CWU is pushing for “a new ownership and governance model that builds a postal service for the workers and customers”.

Sources close to Mr Kretinsky said that they would consider a model which involved some employee ownership or participation.

[Basildon Bond]

If he's looking to buy right now, I'd suggest you don't sell - wait it out. Just my two pennies!

[qwerty2]

Sell your shares lose your job

[Beanyjazz]

If he's looking to buy right now, I'd suggest you don't sell - wait it out. Just my two pennies!

Totally agree! I sold mine during Covid (and I'm not telling people what to do) but if I still had them I wouldn't sell myself, if The Checkered Sphincter does turn out to be 'The Messiah', surely they'll go up. Be a shame to lose money to somebody who clearly doesn't need any more himself.

[Jefferson Starfish]

If DK gets at least 75% of the shares and the regulators agree to the sale of the company, the shares will be de-listed from the stock exchange, which will make them much harder to sell.

You basically have to sell them privately or perhaps DK might agree to buy them at a later date? But he's less likely to do that if they're worth a lot more than now and he already has control of the company.

If you can't sell them, is there any point in keeping them?

[NWpostie]

If DK gets at least 75% of the shares and the regulators agree to the sale of the company, the shares will be de-listed from the stock exchange, which will make them much harder to sell.

You basically have to sell them privately or perhaps DK might agree to buy them at a later date? But he's less likely to do that if they're worth a lot more than now and he already has control of the company.

If you can't sell them, is there any point in keeping them?

Rock and a hard place indeed sell make cash and possible change in T&Cs in the future or don't sell and still have same but no money.

[masterblaster]

Will the big investors sell at any time? who knows, but DK won't be in a position to get 75% if they don't. So I'm looking forward to more and bigger divi's.

[mjd24]

In order for this buy out to succeed, does that mean we all have to sell our shares? Bit confused.

[RobertT]

In order for this buy out to succeed, does that mean we all have to sell our shares? Bit confused.

If he gets a 75% yes vote, he takes charge of the company, but anyone wanting to keep their shares can do.

If he gets a 90%+ yes vote, he can chose to compulsory purchase all shares.

If the vote is less than 75% or the regulators say no, the status quo continues and the only payment will be a dividend of 2p per share.

viewtopic.php?f=38&t=113387

[posted]

If DK gets at least 75% of the shares and the regulators agree to the sale of the company, the shares will be de-listed from the stock exchange, which will make them much harder to sell.

You basically have to sell them privately or perhaps DK might agree to buy them at a later date? But he's less likely to do that if they're worth a lot more than now and he already has control of the company.

If you can't sell them, is there any point in keeping them?

They will be worth be worth something to somebody... just like his 75%-90% will be worth something to him.
The only question is... how you can sell them.

I've just spoken to Equiniti helpline and they said it's for the BIDCo to decide what process there is for minority shareholders (she used the word Dissenters) for things like voting and communication and selling shares etc - within legal bounds of course.

The only question she couldn't confirm is that even if I didn't sell but the offer became unconditional... as a minority shareholder... I would still get the 8p special dividend that the 'sellers' get. I assume that Special Dividend is for all shareholder?

this offer shouldn't be marketed as worth 370p, it's actually worth 368.
The 2p you get regardless of any sale and subject to normal AGM vote

[Roddy Scott]

I'd like to know that if he gets 90% of the votes, and he wants to make it a compulsory buy out, would we still have to pay tax ?

[NWpostie]

Ive just got a form of acceptance from Equiniti asking me to sign and enclose my share certificate.


The letter says my holdings are 227 shares which I brought at the IPO.

It does seem quite early asking for my share certificate, now considering my next step.

[Jefferson Starfish]

Anyone thinking of keeping their shares after the takeover might be interested in what it says in the offer document. There might not be any dividends and they might not be able to sell them: https://idsoffer.shareview.info/docs/Offer_Document.pdf

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: (i) 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; or (ii) the first date of issue of compulsory acquisition notices under section 979 of the Companies Act.

Bidco shall notify IDS Shareholders when the required 75% voting rights threshold has been attained and confirm that the notice period has commenced and the anticipated date of cancellation.

Such cancellation of admission to trading on the Main Market of IDS Shares and the re-registration of IDS as a private limited company shall significantly reduce the liquidity and marketability of any IDS Shares not acquired pursuant to the Offer at that time and their value may be affected as a consequence. Any remaining IDS Shareholders (unless their IDS Shares are acquired by Bidco pursuant to the provisions of Chapter 3 of Part 28 of the Companies Act) would become minority shareholders in a majority controlled private limited company and may therefore be unable to sell their IDS Shares. There can be no certainty that IDS would pay any further dividends or other distributions or that such minority IDS Shareholders would again be
offered an opportunity to sell their IDS Shares on terms which are equivalent to or no less advantageous than those under the Offer.

[Neri1983]

Came here to ask some questions about why the shares "may be difficult to sell" as referenced in the Royal Mail communications if you opted to keep them and they seem to have already been answered from the posts above.

Seems like you practically have to sell them to avoid a massive ball ache down the road. It doesn't sound very appealing having shares worth X amount on paper but then having limited avenues to actually realise that cash equity with them being delisted from the stock exchange. Correct me if I'm wrong but even if you actually found someone, they would likely know the predicament you are in as a minority share holder in a private limited company and offer you far less than their true worth I would imagine.

"Such cancellation of admission to trading on the Main Market of IDS Shares and the re-registration of IDS as a private limited company shall significantly reduce the liquidity and marketability of any IDS Shares not acquired pursuant to the Offer at that time and their value may be affected as a consequence."

[Basildon Bond]

They have got all the minor shareholders running for the phone now. "You'll lose out!". "Sell, sell, sell!". "Jump ship now!". Sounds like the language they use in the documents is intended to panic the minor shareholders all the while the big boys are hoovering the shares up.

Steady lads, steady.