UK calls off probe into Czech billionaire’s plan to raise stake in Royal Mail

The UK has called off its probe into Czech billionaire Daniel Křetínský’s plans to increase his stake in Royal Mail, bringing to a close one of the first reviews to be announced under the government’s new national security powers.

Shares in Royal Mail jumped 8 per cent to 209.37p on Monday afternoon in London after the business department said it would no longer intervene in the secretive tycoon’s bid to increase his holding in the former state-owned delivery group to more than 25 per cent.

The termination of the government review, which had piled pressure on Royal Mail’s management amid an extended dispute with postal workers, will come as a reprieve for the company as it prepares for several days of strike action this winter.

It also sets the stage for Křetínský’s Vesa Equity Investment, Royal Mail’s largest shareholder, to increase its stake in the company above the current 22 per cent. The billionaire has rapidly increased his holdings in the company since acquiring a 5 per cent stake in 2020.

Vesa said it welcomed the decision by new business secretary Grant Shapps, adding that it remained committed to a “long-term investment presence in the UK”.

The government action was initiated by former business secretary Kwasi Kwarteng in August.

The review was launched under the National Security and Investment Act of 2021, which was introduced amid increasing concerns about foreign ownership of British companies. Its conclusion comes weeks after the UK government called off a similar review into French group Altice’s stake in the British telecoms group BT.

Since the act came into force, officials have also used it to scrutinise foreign investments in National Grid’s gas business and UK telecoms group Truphone.

Dubbed the Czech Sphinx, Křetínský is best known in the UK for his 27 per cent stake in Premier League football club West Ham United. He has rapidly increased his stake in Royal Mail as the 506-year-old postal service comes under strain from worker disputes and competition from more modern delivery businesses.

The billionaire also owns energy group EPH, which transports Russian gas to European markets through a partially owned business.

Asked whether publicity this year surrounding Křetínský’s links to Russian gas supplies had raised concerns at Royal Mail, company chair Keith Williams told the Financial Times last week: “That’s for the government to look at under the National Security Act, that’s not for me to look at.”

He added that Křetínský was an “investor like any other investor” who wants “what is best for the business”.

The Department for Business, Energy and Industrial Strategy said “the government will not hesitate to act to prevent risks to the UK’s national security”, adding that any future acquisition of Royal Mail could still be subject to assessment if deemed necessary.