Special delivery: Daniel Kretinsky can increase his stake in Royal Mail above 25%
At sporting events where they are spotted together, Daniel Kretinsky and Anna Kellnerova could easily blend into the crowd. But the 47-year-old bespectacled lawyer and his much younger jumping girlfriend are one of the richest couples in the world, enjoying his fortune.
Kellnerova is one of four children of the Czech Republic’s richest man before his death last year, while Kretinsky amassed his wealth, estimated at £4.3billion, initially by investing in power stations. Known as the Czech Sphinx due to his cold-blooded approach to investing, he has large stakes in famous British names including West Ham United and Sainsbury’s.
Now the city is speculating he is ready to pounce on one of our most iconic companies, International Distributions Services (IDS) better known as the five-century-old Royal Mail – which is embroiled in disputes wages with staff and makes losses of £1million a day.
IDS is due to reveal its latest half-year figures this week on Budget Day, and they won’t be pretty. The consensus among City analysts is that Royal Mail UK’s letters and parcels business will suffer a loss of more than half a billion pounds. The IDS Group as a whole, which includes a profitable international parcels business, is expected to be in the red at £258million.
The prospect of a foreign tycoon taking control of such a historic institution, whose origins date back to Henry VIII, is likely to alarm many observers, from union bosses to small shareholders and the epistolary public. An insider described it as a “classic private equity situation” in which Kretinsky could take out all valuable assets before a “race to the bottom on compensation and terms” ensues. Of course, this is just speculation, but the nerves are on edge.
Parent company IDS has already announced a loss of £219million in the first half of this year, while 10,000 jobs are set to be cut.
This is a vulnerable situation for a key part of the UK’s communications infrastructure. Kretinsky is already the largest shareholder in IDS, owning more than a fifth of the company through his Luxembourg investment vehicle Vesa.
It received UK government approval this month to increase its stake to more than 25%. This in effect gives it the green light to launch a full takeover bid.
Although we are in the age of instant messaging, this is of concern as the post remains a vital part of the country’s communications. And Kretinsky has ties, albeit indirect, to Kremlin gas operator Gazprom. This via a stake in the gas pipeline company Eustream, which has worked to condemn Russia’s invasion of Ukraine. There are other concerns. Why should a Czech billionaire worry if a British pensioner can’t afford to stick a stamp on a card for a grandchild? The price of first class postage has already increased by 3,000% since the 1970s.
And what about service levels? Saturday deliveries are set to be phased out as part of cost savings plans by current management. Others might follow if he took control.
On top of that, it was only after a campaign by this newspaper that Royal Mail offered concessions to people who would have found themselves early next year saddled with stamps they couldn’t use .
Whether the company would be responsive to its customers in the future, under Kretinsky’s ownership, is an open question. These questions trouble ordinary people, but seem unlikely to touch Kretinsky’s conscience. He and Kellnerova can head to the Chateau du Marais, a French chateau known as “little Versailles” just southwest of Paris, to escape the cares of the world. Kretinsky recently bought the enviable property for €43m (£37m) in a joint investment with the chief executive of an investment group owned by the Kellner family.
The plan is to turn it into a hotel similar to a private resort that Kretinsky co-owns in the Maldives.
In her mid-twenties, Kellnerova is not the poor relation of this pact. She is an accomplished rider who competed in the Tokyo Olympics and is also the heiress to the daughter of Petr Kellner, an associate of Kretinsky, who died after a helicopter crash during a skiing trip to Alaska.
Heiress: rider Anna Kellnerova
Kretinsky is the son of a university professor and a judge. After studying law, in 1999 he joined J&T, a firm involved in banking, finance and investment, mainly in Russia and Eastern Europe. He made his fortune buying power stations through his energy company, EPH, the largest in Central Europe and a major player in the UK. He has invested over £2billion here and owns several power stations, including Lynemouth in Northumberland. Elsewhere, Kretinsky has a stake in US department store Macy’s, French newspaper Le Monde and Dutch postal group Post NL.
Naturally, he has plenty of oligarch-style trinkets, including Heath Hall, a £65million mansion in Hampstead, northwest London, and his name is listed in the Panama Papers – a cache of documents leaked in 2016 – in connection with a company in the British Virgin Islands. called Wonderful Yacht Holdings.
Is he, one might ask, the kind of person who would put the interests of the British epistolary public ahead of his own pecuniary gain?
It has been suggested he could split up the business, selling Royal Mail’s traditional letter delivery arm while selecting the far more lucrative international parcel delivery service. Kretinsky’s decision comes at a difficult time for Royal Mail, which was privatized in 2013 when its shares went public for £3.30. They are now trading at around £2.40 – having more than halved this year alone.
But the government, after considering Kretinsky’s proposal to increase his stake under legislation designed to protect key domestic assets from damaging foreign takeovers, pushed it through.
Have eyes been taken away from the ball in the recent turmoil? The UK has gone through three business secretaries since the summer when the review began. Approval was granted by Grant Shapps, following the departures of Jacob Rees-Mogg and Kwasi Kwarteng.
Does the Trade Department really think a Czech billionaire is the right person to provide a sustainable, universal, affordable and secure postal service in the UK?
The government could and should block a full Kretinsky bid, if he ever makes one. And there is another possible line of defense: investor power. Royal Mail staff and private investors hold between them a 20% stake in the business. If Kretinsky launches a takeover bid, they should practice shareholder democracy and rally to reject it.
Tycoon with a £37m seat of power
Daniel Kretinsky has accumulated an eclectic array of assets and is a major player in the energy market.
The Czech billionaire’s electricity company EPH – the biggest in central Europe – is one of the largest independent producers in the UK, where he has invested more than £2bn.
It owns several power stations including one in Lynemouth, Northumberland.
‘Little Versailles’: Chateau du Marais, Kretinsky’s retreat near Paris, cost him and the Kellners £37m
As well as owning more than a fifth of Royal Mail, he has another major stake in the UK – a 10% stake in Sainsbury’s, where he is the second biggest investor.
Both are held through Vesa Equity, a private company registered in Luxembourg.
He has a 27% stake in West Ham United and is part owner of Czech club Sparta Prague. Elsewhere, his holdings include a stake in US department store chain Macy’s, French newspaper group Le Monde and Dutch postal group Post NL.
He also appeared in the Panama Papers – a leaked cache of confidential documents – in connection with a British Virgin Islands company called Wonderful Yacht Holdings.
He recently bought the Chateau du Marais, near Paris, for £37million.
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