Government to scrutinise £5.3bn Royal Mail takeover

(Sharecast News) - The new Labour government is set to look closely at the £5.3bn takeover of Royal Mail-owner International Distribution Services by Czech billionaire Daniel Kretinsky. Business secretary Jonathan Reynolds said it would be "reasonable to expect [the deal] to be called in", as ministers had intervened when Kretinsky increased his stake two years ago.

Speaking to reporters at the Farnborough air show on Monday, Reynolds confirmed he would be contacting Kretinsky later this week.

He continued: "Fundamental to this, what is the business plan, what does it mean for the UK's core national interest in Royal Mail...and how can we have confidence in the guarantees put forward in that business plan that we can rely on."

Kretinsky's EP Group offered 360p per share along with a 2p final dividend for the 500 year old-business in May.

Kretinsky - who has a 27% stake - has pledged to maintain the Royal Mail's guarantee of services six days a week for five years.

Although backed by the board, the acquisition still needs to be approved by the government, which has the power to block the takeover. Shareholders will vote on the deal in September.

IDS employs around 150,000 people

As at 1300 BST, shares in IDS were largely unchanged at 342.1p.