We MUST stop this Royal Mail heist: Six reasons why sale to Czech tycoon is bad for investors, bad for customers and bad for Britain

The postie, in his all-weather shorts, is so much-loved in one Hertfordshire village that each Christmas residents buy him a £500 gift voucher, plus champagne and chocolates.

At this festive season, love it or hate it, the Royal Mail is an enduring feature of our lives.

Whether one is queueing for an hour-and-a-half to post a gift to a loved one Down Under or forking out a whopping £13.20 for a book of eight, bar-coded first-class stamps, most households have a relationship with the Royal Mail.

There is nothing nicer than receiving a handwritten card (even if delayed!) in an age when e-greetings pile into the inbox alongside scams, junk and other unwanted messages.

The Royal Mail’s bright red pillar boxes with the crest of the monarch, stamps with the King’s head – even the unfailing nuisance of having to visit often down-at-heel sorting offices to collect parcels – are an unchanging aspect of British life. 

Takeover: Daniel Kretinsky, a Czech billionaire who’s had historic entanglements with Vladimir Putin’s regime in Russia, is close to taking control of Royal Mail

Yet this oh-so-familiar institution, which trades on the London stock market as International Distribution Services (IDS), is facing an existential crisis.

Daniel Kretinsky, a Czech billionaire who’s had historic entanglements with Vladimir Putin’s regime in Russia, is close to taking control with a £3.6bn takeover bid. 

Business Secretary Jonathan Reynolds has given a thumbs-up to a deal, naively taking guarantees made as to the future of the postal service and the way it is run at face value.

If you think the post is too expensive now – at £1.65 for a first-class stamp and 85p for second class – just wait.

As for delays, Royal Mail has just been slapped with a £10.5million fine for delivering more than one in four first-class letters late. This too may get even worse under Czech ownership as Kretinsky is likely to try to maximise his profits and to scale back service commitments.

Yet our mealy-mouthed, insensitive and business-naive Labour politicians don’t seem to care.

Reynolds has declared would-be buyer Kretinsky a ‘legitimate businessman’.

Scrutiny by a Government probe, under the terms of the National Security & Investment Act, failed to abort the deal.

There are six good reasons why the Government, the public, posties and shareholders should have told Kretinsky to take a hike:

1) Russian Connections

Kretinsky, 49, who heads the buying consortium, is a billionaire. Much of his wealth has been accumulated doing energy and pipeline deals with Russian president Putin, who is currently sanctioned by the West.

He is still entangled in a lengthy and complex legal dispute in Russia over the fate of his coal interests.

Kretinsky has been backed in his deal-making, which includes ownership of West Ham United FC, by an elusive Slovak investment bank J&T, which is embroiled in an ongoing alleged corruption legal case in the far-off Turks and Caicos Islands.

2) Debt Pile

The bid is to be financed by some £3billion of high-interest loans provided by foreign banks.

This is in addition to £2billion of debts already sitting on the balance sheet of the Royal Mail owner IDS.

Such highly-leveraged, debt-driven takeovers, by uncaring overseas financiers, have a terrible record.

The implosion of Thames Water, – currently awaiting a bailout – has been driven by the need to meet the interest charges on £16billion of debt.

The result is under-investment in repairing leaky pipes and tons of sewage spilling into the River Thames. At the grocer Asda, a highly-leveraged takeover has seen the group suffer a calamitous decline in sales, market share and reputation.

3) Security

The roots of the Royal Mail can be traced back 500 years to a ‘secure’ messenger service for King Henry VIII.

Centuries later it is the way in which vital public services such as HMRC, the Metropolitan Police, the NHS and other parts of government communicate with us securely in an age of internet scams.

It is also, of course, key to postal voting and therefore our democratic process. Most households in Britain will be familiar with the brown, windowed envelopes which land on our doorstep.

Concerns: Kretinsky, nicknamed the Czech Sphinx, is likely to try to maximise his profits and to scale back service commitments

4) Culture

Royal Mail is one of the most recognisable brands in the UK.

The postie in his shorts, in all weathers, is a visitor we anxiously await especially in the run-up to Christmas, the new year or a birthday. 

The Royal Family is celebrated with a cipher, dating back to Queen Victoria, on the bright red postboxes in every town, city and hamlet the length and breadth of the UK.

The stamps, decorated with the monarch’s head, are enjoyed by every schoolchild collector.

The commemoratives, exalting everyone from Sir Winston Churchill to the fictional Harry Potter, offer snapshots of all that makes Britain great. 

The price of a first-class stamp may seem high at £1.65 but the service will deliver to the most remote parts of the country (mostly!) by the next day.

No other commercial service would offer this. This uniquely British heritage is unlikely to mean as much if Royal Mail were to become just another outpost in Kretinsky’s commercial empire that has spread from roots in eastern Europe.

He may also seek to maximise his profits by cutting back on services and raising stamp prices.

5) Investors

Shareholders, including the posties and other employees who own nearly 5pc of the stock, risk being short-changed.

A body of activist investors believes that if the regulator, Ofcom, gives Royal Mail permission to be more flexible on the price of first-class deliveries and the regularity of the second-class service then Kretinsky’s offer price of 370p per share will prove a bargain for him.

They also think that Royal Mail will have been sold for far less than it is really worth.

In that case the board, headed by the former British Airways boss Keith Williams, should withdraw its support or resign, rather than allow shareholders to be sold short.

6) City stitch-up

Advisory firms such as Goldman Sachs, lawyers, banks and consultants are in line to collect mouth-watering fees of £146million if the deal goes ahead.

They have no pride in a British heritage band and will advise the board that they have no choice – saying it is their fiduciary duty (obligation under company law) – but to accept the offer.

It is nothing of the kind. Stock market history tells us that brave boards such as pharma group AstraZeneca, miner Anglo American and others stand firm and reject unsatisfactory deals.

This shows respect for their company’s history and a commitment to do their job, which is to create value for shareholders themselves, rather than selling out. 

Too many foreign takeovers of UK firms such as Thames Water, Heathrow Airport and Arm Holdings have been bad for investors, bad for customers and bad for Britain.

There is still time to kill the bid for the Royal Mail.

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