Potential Takeover of Royal Mail Sparks Financial Concerns

International Distributions Services warns that Daniel Křetínský's £3.5bn bid could risk Royal Mail's finances. Ofcom investigates IDS for missing delivery targets, fining them £5.6m last year. IDS reports £26m profit, with Křetínský having until 29 May for a formal bid.

Royal Mail owner, International Distributions Services (IDS), has expressed concerns over a possible £3.5bn bid by Czech billionaire Daniel Křetínský's EP Group, citing risks to the company's finances.

The warning surfaces as regulatory body Ofcom starts an investigation into IDS for not meeting annual delivery targets for two consecutive years, following a £5.6m fine last year.

IDS, in its delayed annual results, acknowledged adequate resources for ongoing operations but highlighted uncertainty regarding future financing post-takeover.

IDS reported a £26m operating profit for the year ending March, compared to a £742m loss from the previous year.

EP Group has until 29 May to formalize its bid.

Meanwhile, Royal Mail considers potentially reducing its second-class service to manage costs amid industry changes.