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Czech billionaire Daniel Křetínský is preparing a takeover bid for Royal Mail owner International Distributions Services, according to people familiar with the matter.
Křetínský, a lawyer-turned-energy tycoon known as the “Czech Sphinx”, has built a 27.5 per cent stake in the company through his vehicle Vesa Equity Investment.
The company, comprised of Netherlands-based parcels business GLS and the UK’s Royal Mail, had a market capitalisation of £2.1bn before the news, which pushed the share price up 20 per cent.
Křetínský has not yet formally put forward any offer but under UK takeover rules he will probably be required to make a statement on Wednesday about whether he intends to proceed with a bid.
Royal Mail was privatised between 2013 and 2015 but has been grappling with the difficulties of maintaining its expensive delivery network in the face of a sharp decline in its traditional letter-delivery business.
The company delivered 20bn letters to 28mn addresses in the 2004-5 financial year, while this year it expects to deliver 7bn letters.
The postal business remains regulated. Royal Mail proposed last month that it should be allowed to deliver second-class letters only three times a week instead of six. The plans would reduce the burden of the universal service obligation, which forces the company to deliver items everywhere in the UK for the same price.
It has been trying to resolve the problems partly by capturing a larger part of the UK’s fast-growing parcel delivery business, in which it is the market leader. However, it faces fierce competition from rivals such as Amazon Logistics.
Křetínský’s other investments include stakes in UK supermarket chain J Sainsbury and London football club West Ham United.
Křetínský and IDS did not immediately respond to requests to comment.