Royal Mail Group Negotiations – Update for CWU Members

[TopperGas]

- if RM is supposedly “dying” why has Kretínsky just paid billions for a full acquisition?

Nobody said RM is dying - just the letters side of it.
He bought a parcel business with a successful GLS.

If you haven't understood that then the rest of your post is gibberish.

DK bought both the mail and parcel businesses, you have to assume he feels.hencsm.make both profitable.

[postslippete]

- if RM is supposedly “dying” why has Kretínsky just paid billions for a full acquisition?

Nobody said RM is dying - just the letters side of it.
He bought a parcel business with a successful GLS.

If you haven't understood that then the rest of your post is gibberish.

It's all management spin Clash. As the other OP said Kretinksky didn't just buy GLS but paid £3.5b to acquire all of IDS which includes RM and the universal service. If it was just about GLS then he could have made a more targeted investment years ago without the political headache and takeover process. But he didn't because imho he knows that there is a lot of value left to extract in RM.

RM's letter volumes may be in structural decline but it still processed over 7 billion addressed letters in 2023. It's not dying but has being deliberately stripped down for years as it still makes hundreds of millions from stamps and large letter surcharges alone. There's no universal service on unaddressed mail such as D2Ds which we are still told needs to be delivered every week so to me RM are still chasing the extra revenue even though they are saying its unprofitable.

DK is a shrewd businessman and like may asset stripping investors sees underpriced value and weakened labour and imho he's banking on turning RM into a high efficiency, low cost delivery machine (that includes letters) and that means more pressure on workers, not less.

[clashcityrocker]

DK is a shrewd businessman and like many asset stripping investors sees underpriced value and weakened labour blah blah blah

Give me one instance of DK asset stripping.
Investments in PostNL, Casino, Le Monde, West Ham, Sparta Prague, Sainsbury's - where is the asset stripping?

I think you have a medical condition where you think you know a lot more than you actually do.

[postslippete]

Give me one instance of DK asset stripping.
Investments in PostNL, Casino, Le Monde, West Ham, Sparta Prague, Sainsbury's - where is the asset stripping?

I think you have a medical condition where you think you know a lot more than you actually do.

If knowing how to read financial history and spot a predatory investor is a medical condition then I'll take the diagnosis Dr Clash.

As for your examples, DK has consistently taken minority stakes that give him some influence without that operational responsibility. But the Czech Sphinx has clearly got you fooled if you believe that his motives in buying IDS are altruistic which is either naive or wilfully blind on your part. He even said in his own words that he targets industries that others think are dying because he believes that they will die "much more slowly than what people think" and obviously there's money to be made while they do. He's not even trying to hide his motives and I'm pretty certain that he didn't go through the political headache of a full takeover of IDS out of some noble belief in public service and to improve our working conditions!!

[clashcityrocker]

When or where did I say I thought he had bought IDS for altruistic reasons?

[postslippete]

When or where did I say I thought he had bought IDS for altruistic reasons?

Well, you tell me why you think a billionaire has bought IDS and expects to turn it around to make a decent return on his investment?

[clashcityrocker]

Well, you tell me why you think a billionaire has bought IDS and expects to turn it around to make a decent return on his investment?

No. I don't know his motivation. You would have to ask him.

You trotted out the same old bullshit about him being an asset stripper but when asked for evidence of this you just ignored the question.
You then put words in my mouth about him buying the business for altruistic reasons.

I think you are an idiot who is overly fond of his own opinions.

[Mr Rush]

They buy undervalued assets where they believe they can strip costs or squeeze more profit from what’s already there and that should tell anyone that the situation isn’t as bleak as it’s been painted.

I like to compare DK's business practice to that of a dumpster diver. He picks up a discarded pizza box and exclaims, 'Look, there's still loads of cheese left!'

[wandle]

It’s been suggested that Kretinskyy went for a full takeover so that he could squeeze-out minor shareholders including Rico Back, who still held a stake in IDS and tried to ring-fence the GLS part of the group??

[postslippete]

No. I don't know his motivation. You would have to ask him.

You trotted out the same old bullshit about him being an asset stripper but when asked for evidence of this you just ignored the question.
You then put words in my mouth about him buying the business for altruistic reasons.

I think you are an idiot who is overly fond of his own opinions.

I simply responded to what you wrote, Clash. If I misunderstood your point then I was trying to clarify that by asking for your opinion.

As for the "asset stripper" claim, it’s not exactly new. Since privatisation, Royal Mail has sold off hundreds of millions in London property assets - Nine Elms, Paddington, Mount Pleasant - prioritising short-term gains over service reinvestment.

https://www.theguardian.com/business/20 ... kretinsky?

Even during its profitable years, RM cut services, closed delivery offices, and pushed to reduce the USO. Ofcom has repeatedly investigated missed delivery targets while shareholders enjoyed generous dividends and buybacks. Even during the strikes the CWU accused RM leadership (backed by major shareholders like Vesa Equity) of trying to break up the company and outsource work.

I can't speak for Kretinsky’s intentions, but many analysts warn that he may use Royal Mail’s extensive property portfolio to manage takeover debt which is a common asset-stripping tactic. The pattern is familiar: buy undervalued, property-rich firms, sell the real estate to pay down debt, and retain the profitable bits.

https://www.theguardian.com/business/20 ... retinsky?
https://www.investment-society.ch/post/ ... s-sectors?

Yes, there’s a five-year pledge to uphold the USO and limit debt, but it's time-limited - just long enough to ease regulatory approval, not necessarily to guarantee it's long-term protection. Ask yourself: why is he buying now?

IDS owns 1,800 sites across 300 hectares, much of it in prime city locations. He’s buying the company at a discount, based on the depressed share price. If USO obligations are relaxed, costs drop and margins improve, especially for 2nd class. And don't forget he will also own GLS - the profitable parcel arm that could easily be spun off or sold. With full ownership Kretinsky wouldn’t need shareholder approval to make these changes and that’s when the big shifts (or breakups) usually happen.

Hopefully, I'm wrong and something else happens to prevent that. For what it's worth I've given you my account without shouting "bullshit" or calling people idiots!

[thefox]

It's not nice to call people names clashy

[Hyrrokkin]

Well, you tell me why you think a billionaire has bought IDS and expects to turn it around to make a decent return on his investment?

No. I don't know his motivation. You would have to ask him.

You trotted out the same old bullshit about him being an asset stripper but when asked for evidence of this you just ignored the question.
You then put words in my mouth about him buying the business for altruistic reasons.

I think you are an idiot who is overly fond of his own opinions.

Pot kettle black spring to mind with that

[TopperGas]

It’s been suggested that Kretinskyy went for a full takeover so that he could squeeze-out minor shareholders including Rico Back, who still held a stake in IDS and tried to ring-fence the GLS part of the group??

If he just wanted GLS then why's he messing about trying to force though ODM at RM as soon as the sales gone through? Personally I feel GLS' value has been overblown, when it's a tiny delivery company compared to RM Inc PF, UK coverage wise.

[blacov]

- if RM is supposedly “dying” why has Kretínsky just paid billions for a full acquisition?

Nobody said RM is dying - just the letters side of it.
He bought a parcel business with a successful GLS.

If you haven't understood that then the rest of your post is gibberish.

It's all management spin Clash. As the other OP said Kretinksky didn't just buy GLS but paid £3.5b to acquire all of IDS which includes RM and the universal service. If it was just about GLS then he could have made a more targeted investment years ago without the political headache and takeover process. But he didn't because imho he knows that there is a lot of value left to extract in RM.

RM's letter volumes may be in structural decline but it still processed over 7 billion addressed letters in 2023. It's not dying but has being deliberately stripped down for years as it still makes hundreds of millions from stamps and large letter surcharges alone. There's no universal service on unaddressed mail such as D2Ds which we are still told needs to be delivered every week so to me RM are still chasing the extra revenue even though they are saying its unprofitable.

DK is a shrewd businessman and like may asset stripping investors sees underpriced value and weakened labour and imho he's banking on turning RM into a high efficiency, low cost delivery machine (that includes letters) and that means more pressure on workers, not less.

It is so refreshing to see that someone has some brain to see right through it :) Well done and I totally agree with this.

[Hyrrokkin]

The flip side of that being why has an international businessman just paid £3.5B for a company that we’ve been told over the last X years is on its knees. He hasn’t walked in an paid the obligatory £1 to take on a dying company and all its problems. £3.5B - just think about that amount, even the Sphincter himself says he likes buying businesses that say they are struggling as the picture is never as bleak as it’s painted.

RM started this “no money” nonsense and have since brainwashed the CWU who just trot it out parrot fashion in every statement they put. Unfortunately it’s now the common narrative! This is a multi billion pound business and the only reason it doesn’t show the profits it should is because of the large wages, bonuses & gratuities paid out to people at the top. That in itself shows how successful financially the business itself is, however at the top end it’s run one way and at the bottom end it’s run the complete opposite where you would think we are some old corner shop business trying to survive amongst the conglomerates on the High Street.
The CWU should be attacking this not peddling the RM narrative to its members.

You've just pointed out the glaring contradiction a lot of us have been thinking - if RM is supposedly “dying” why has Kretínsky just paid billions for a full acquisition? Investors like him don’t throw money at hopeless causes. They buy undervalued assets where they believe they can strip costs or squeeze more profit from what’s already there and that should tell anyone that the situation isn’t as bleak as it’s been painted.

The business model isn't broken and RM has had rough years but most of that damage has been self-inflicted with costly executive decisions, dividends that were paid even during operating losses, a toxic management culture and prioritising parcels over service standards. All while using a manufactured “crisis” narrative to justify cuts, bullying, and restructuring.

The CWU seems to have internalised too much of that doom-talk and MW did it in the last deal when he talked about RM going into administration. But instead of repeating management’s line about “financial reality” they should be demanding to see all the books including cross-subsidies and executive pay. Why did the market just value the business at £3.5 billion? Why is there always money for executive bonuses? Rather than being grateful to be at the table, the CWU should be reminding EP Group and RM management who actually runs this business every day — the postal workers.

Profit is being generated, it’s just not being shared fairly. There’s always money for the top, while “cost savings” are just code for job cuts, workload hikes, and demoralisation on the shop floor. Royal Mail isn’t dying, it’s being drained to reward the few at the expense of the many.

Great post which pretty much sums up the lies we are being fed

No one pays billions to buy a 'dying' business on it's last legs - any idiot can see that unless you are one of the contrary know-it-all CWU appeasers who want to be 'different' for the sake of it.
RM has been on it's last legs for years it is a wonder it is still standing - but hey ho as long as we get another pathetic pay deal with less and less t&c then we should all be happy and accept the crumbs we get and be grateful for it and keep our mouths shut.
Do not mention the bosses and the massive salaries and bonuses-nothing to see here move along now.
RM & CWU bosses are selling lies again.