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UK will not take action over Czech mogul’s plan to raise Royal Mail stake
Global Banking & Finance Review®
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(Reuters) -Britain is no longer intervening in Czech billionaire Daniel Kretinsky’s plan to increase his stake in Royal Mail parent International Distributions Services, sending the company’s shares up more than 7% on Monday.
(Reuters) -Britain is no longer intervening in Czech billionaire Daniel Kretinsky’s plan to increase his stake in Royal Mail parent International Distributions Services, sending the company’s shares up more than 7% on Monday.
In August, Royal Mail said it had been notified by then business minister Kwasi Kwarteng that he was exercising powers to look into proposals by Kretinsky’s vehicle, Vesa Equity Investment, under the National Security and Investment Act.
The act gives the government greater say over deals where national interests might be involved. The Royal Mail review came days after the government decided not to take action over billionaire Patrick Drahi’s stake in telecoms firm BT.
On Monday, International Distributions Services said it had been notified by the Secretary of State for Business, Energy and Industrial Strategy that no further action is to be taken over Vesa potentially increasing its stake in the company to more than 25%.
“Following careful consideration, the government will take no further action on the acquisition of increased shareholdings by Vesa Equity Investment in Royal Mail and a Final Notification has been issued to parties,” the Department for Business, Energy and Industrial Strategy said in a statement.
Vesa, Royal Mail’s biggest shareholder which is ultimately controlled by Kretinsky and his business partner Patrik Tkac, in August said it had voluntarily contacted the government to inform them of its intention to increase its stake in Royal Mail, which is currently just over 22%.
“Vesa Equity Investment welcomes the decision … and reiterate our commitment to continuing long term investment presence in the U.K., including our partnership with Royal Mail,” a spokesperson said.
Kretinsky, who built one of Europe’s largest energy groups, EPH, has stakes in Le Monde newspaper, French retailer Casino, British supermarket group Sainsbury and French TV group TF1, among others.
(Reporting by Chandini Monnappa and Aby Jose Koilparambil in Bengaluru; Editing by Krishna Chandra Eluri)
Equity investment refers to the purchase of shares in a company, giving investors ownership rights and the potential for dividends and capital appreciation.
A stake in a company represents the ownership interest that an individual or entity holds, usually measured in terms of shares or percentage ownership.
A shareholder is an individual or institution that owns shares in a company, entitling them to a portion of the company's profits and voting rights.
A final notification in business acquisitions is a formal communication from regulatory authorities indicating that no further action will be taken regarding a proposed transaction.
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