Czech billionaire’s Royal Mail stake under national security review

Ministers are to carry out a national security review into the ownership of Royal Mail, after it emerged the Czech billionaire, who is the biggest shareholder in the 500-year-old postal company, has increased his stake.

The intervention came as Royal Mail executives prepared for the first of four days of nationwide strike action over pay and conditions, with members of the Communications Workers Union due to quit on Friday.

The company said it received a government notification that its largest shareholder, Vesa Equity Investment, may increase its stake to more than 25%. Vesa is controlled by Daniel Křetínský, whose financial holdings also include Sainsbury’s and West Ham United.

In a statement to the Stock Exchange, Royal Mail added: ‘The Secretary of State has advised Royal Mail that such action would constitute a trigger event under the NSI Act. [National Security and Investment Act] and that he is exercising his power of appeal under section 1 of the NSI Act.

“Royal Mail will co-operate fully with this review and a further announcement will be made as appropriate.”

Vesa, which is the company’s largest shareholder, confirmed that it announced plans to increase its stake above 25% on July 13. Vesa owned 22% of the company in its last disclosure in July.

Křetínský, known as the “Czech sphinx” for his low public profile, has not commented in detail on his intentions for Royal Mail since becoming its largest shareholder in 2020.

The businessman, whose interests span coal, gas and media, has seen stake values ​​soar during the pandemic as Royal Mail benefited from the boom in online shopping and the delivery of test kits.

Křetínský’s decision to increase his stake in Royal Mail will spark speculation that he has plans for a full takeover of the group.

Any takeover bid could be politically strained given the tycoon’s ties to Russian gas operator Gazprom. His company EP Infrastructure (EPIF) has a 49% stake in Eustream, which operates a system for transporting Russian gas to central and eastern Europe via Slovakia.

Křetínský, 46, also owns Sparta Prague football club and is believed to be worth around £3bn. His girlfriend is show jumping champion Anna Kellnerová, 25, the daughter of the late Czech businessman Petr Kellner, who was once the country’s richest person.

In November, Royal Mail paid a £400million dividend to investors including Vesa. However, the company has seen its stock drop almost 50% this year. The stock rose 1.5% to 265.8p on Thursday after the announcement.

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The announcement comes just a day before Royal Mail staff prepare to begin their first strike since 2009.

Royal Mail workers will begin a 24-hour strike at 4am on Friday and strike again next Wednesday, before further action on September 8 and 9. It has been estimated that the action will cost the company, which employs 115,000 people, £100million, with each day costing £10million in letters and £15million in parcels.

Staff received a 2% pay rise, retroactive to April, and a further 3.5% increase if they agree to changes in working practices. Staff oppose these changes and argue that they should receive unconditional pay increases.

Czech billionaire’s Royal Mail stake under national security review

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