UK-based International Distribution Services PLC (GB:IDS), owner of Royal Mail, reportedly got the green light for its acquisition by Czech tycoon Daniel Křetínský. According to the Financial Times, an official statement will be made on Monday. Meanwhile, IDS and the UK’s Competition and Markets Authority did not comment on the news.
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IDS is a British distribution company, offering postal and courier services through its brands Royal Mail, Parcelforce, and GLS. Year-to-date, IDS stock has gained 31.6% in trading.
IDS’ Acquisition Signals Fresh Start
The potential acquisition of Royal Mail’s owner signals a fresh start for the brand after recent years of struggles due to a significant drop in service demand. Moreover, the company has faced persistent challenges like labor strikes and mounting competition from e-commerce. Last week, Ofcom imposed a £10.5 million fine on the company for failing to meet delivery targets, marking the second penalty from the regulator since the pandemic. Together these challenges have eroded public trust in one of the UK’s most iconic institutions.
Consequently, the new leadership is viewed as a new beginning for the brand. Křetínský has earlier stated his intentions to modernize IDS’ brand Royal Mail after years of strained relations with postal workers and other issues. IDS initially accepted the offer from Křetínský’s EP Group in May 2024 and was awaiting regulatory approvals.
The original deal to acquire IDS included key commitments, such as retaining Royal Mail’s UK headquarters, acknowledging the postal workers’ union, and upholding the obligation to deliver mail nationwide at consistent prices.
What Is the Target Price for IDS?
According to TipRanks, IDS stock has received a Hold rating, backed by one Hold recommendation from analyst Andy Chu from Deutsche Bank. Last week, Chu reiterated a Hold rating on the stock and raised his price target from 268p to 368p. The IDS share price target of 368p implies a slight upside of 2.7% on the current share price level.
