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Royal Mail takeover to face national security scrutiny, says Hunt

Jeremy Hunt
Jeremy Hunt

The Czech billionaire Daniel Kretinsky’s £3.5bn bid for Royal Mail will be scrutinised to ensure it does not threaten national security, Jeremy Hunt has said.

Mr Hunt, the Chancellor, said it is vital there are “no risks” to “core infrastructure” when asked by The Telegraph about Mr Kretinsky’s plan to purchase the postal service’s parent company International Distributions Services (IDS).

He said: “We do always look at national security considerations and make sure that, in terms of our core infrastructure, there are no risks to those going forward, and any bid for Royal Mail would go through that normal process.”

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IDS’s board has said it is minded to accept the offer by Mr Kretinsky, known as the Czech Sphinx for his inscrutable manner.

The investor’s company EP Group has submitted a revised of 370p per share for the company, an increase of 16pc on a previous offer which had been rejected.

The billionaire was previously vetted under national security and investment rules in October 2022, when his stake in the company rose to above 25pc. No concerns were identified.

Negotiations are ongoing between IDS and EP Group, but the board said on Wednesday that Mr Kretinsky would commit to protecting six-day first-class letter deliveries.

Earlier this week, IDS said: “The Board has sought, and EP Group has agreed to offer as part of the Proposal, a set of contractual undertakings to protect key public interest factors and recognise Royal Mail’s status as a key part of national infrastructure,” IDS said when announcing the bid this week.

“It is anticipated that the commitment to offer these contractual undertakings to the UK Government (or, where applicable, to the Company and/or other stakeholders directly) would be reflected in the cooperation agreement between the parties if a firm offer is made.”

Mr Hunt said that, as a principle, the Government is keen that the nation is open to international investment.

He said: “As a rule, we welcome international investment in British companies.

“One of the reasons we have attracted more greenfield, foreign direct investment than anywhere in the world apart from the US and China is because of our openness to companies from overseas and to the additional, not just capital they bring in, but also the expertise and the funding, so we will continue with that approach.”

It comes amid a Government crackdown on investment and trade in highly sensitive industries including artificial intelligence, quantum computing and critical minerals.

Oliver Dowden, the Deputy Prime Minister, last month launched a review in an effort to prevent “capital from the UK being invested in another country where we believe it will enhance, for example, military end-use capabilities”.

Royal Mail was privatised by the Government in 2013 in a public listing which raised £3.3bn for the Exchequer, at 330p per share.

Shareholders have had a bumpy ride since, with the price swinging between 124p and 606p over the past five years.

Mr Kretinsky and EP Group declined to comment.