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(Alliance News) - International Distributions Services PLC on Wednesday agreed to a GBP3.57 billion takeover offer, which the IDS chair said included a "far-reaching package" of binding commitments regarding the courier's future operations in the UK.
IDS is a London-based postal services provider and the owner of Royal Mail and Parcelforce.
The offer has been made through a special purpose acquisition vehicle owned by J&T Capital Partners as and EP Corporate Group as, a subsidiary of EP Investments SARL.
EP Investments is a Luxembourg-based company founded by Czech billionaire businessman Daniel Kretinsky, who also serves as its chair.
On May 15, Kretinsky put forward a bid for IDS worth around GBP3.5 billion, to which IDS said it was "minded" to agree.
The agreed offer is for the entire share capital of IDS, other than that owned or controlled by VESA Equity Investment SARL, which represents around 28% of IDS's share capital as of Tuesday.
Under the terms of the offer, shareholders will receive 370 pence for each IDS share. The offer values IDS's entire share capital at around GBP3.57 billion and implies an enterprise value, including debt, of GBP5.28 billion.
Shares in IDS were up 3.4% at 332.00 pence each in London on Wednesday morning, giving the company a market capitalisation of GBP3.18 billion.
The all-cash offer to IDS shareholders includes a payment of 360p per share from the buyers, a final dividend of 2p from IDS in respect of the financial year that ended March 31, and a special dividend of 8p, contingent on the acquisition becoming unconditional.
The acquisition will be implemented by way of a takeover offer, though EP's announcement stated that it retains the right to implement the acquisition by way of a scheme of arrangement.
IDS said that its directors consider the terms of the acquisition to be "fair and reasonable", and "intend to recommend unanimously that IDS shareholders should accept or procure the acceptance of the offer".
Should the acquisition take place by way of a scheme, IDS's directors urged shareholders to "vote in favour of the scheme at the requisite court meeting and the resolutions at a general meeting of IDS shareholders".
IDS Chair Keith Williams said: "IDS has the potential to become a leading international logistics player. Both the IDS board and EP are acutely aware of their responsibilities to IDS and particularly to the unique heritage of Royal Mail and its obligations as the designated universal service provider of postal services in the UK."
Williams noted that IDS has negotiated a "far-reaching package of legally binding undertakings and commitments which provide our customers, employees and broader stakeholders with important safeguards."
These include five-year guarantees to maintain the one-price-goes-anywhere service in the UK, and for first class letters to continue to be delivered six days a week.
The offer also guarantees that, for the three-year period following completion, there will be no change in the control of Royal Mail or General Logistics Systems BV, IDS's international parcels arm.
"It is the IDS board's belief that EP will continue to enhance IDS's investment in strategic areas such as network and out-of-home solutions," Williams continued.
Kretinsky commented: "The EP group has the utmost respect for Royal Mail's history and tradition, and I know that owning this business will come with enormous responsibility - not just to the employees but to the citizens who rely on its services every day. The scale of the commitments we are offering to the company and the UK government reflect how seriously we take this responsibility, to the benefit of IDS' employees, union representatives and all other stakeholders."
It is expected that an offer document, containing further information on the acquisition and the actions to be taken by IDS shareholders, will be published within 28 days.
The acquisition is currently expected to complete in the first quarter of 2025.
By Hugh Cameron, Alliance News reporter
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