EP Group offer document

As you know, International Distribution Services plc (IDS) (the parent company of Royal Mail and GLS) has received an offer from EP Group to acquire the company for a total value of 370 pence per IDS share. The Board of IDS is recommending the offer to shareholders. 

Today, we have reached the next stage in the process. EP Group has published what is known as the ‘offer document’ which will be made available to all shareholders. This is a comprehensive document designed to outline the conditions and requirements for accepting the offer.

It covers all aspects relating to the offer such as the acceptance process for shareholders, terms and conditions of the offer, expected timelines and legal obligations. Each shareholder will receive communication relating to their shareholdings explaining what action they need to take.

The offer document is long and technical so we have summarised some of the key things you need to know. This video also provides an explanation of the key aspects of the offer document. 

Background to the offer

The Board believes that the terms of the offer from EP Group are fair and reasonable. The offer represents a significant premium (72.7%) above the share price of 214 pence at the close of business on 16 April 2024, the last business day before the commencement of the offer period.

Importantly, the offer includes a series of legally binding undertakings and commitments that reflect Royal Mail’s unique role in society and protect the Universal Service and employee and wider stakeholder interests. For more detail on the legally binding undertakings and commitments please read our Briefing Note.

Timeline and how the process works

The acquisition will only go ahead if:

1) Shareholders holding 75% of IDS shares accept the offer and

2) The relevant regulatory authorities approve the transaction

If these conditions are satisfied, the acquisition will complete and IDS will become a private company owned by EP Group. This is currently expected to take place in the first quarter of 2025.  

The regulatory approvals are expected to take a number of months. The offer will remain open throughout this time and for a period after the regulatory approvals have been obtained.

If the 75% threshold is not met, or if the regulatory approvals are not given, the offer will not complete, in which case IDS will remain a listed company. 

Shareholders must take action to accept the offer

If you are a shareholder, the process for accepting the offer depends on the way you hold your shares and it is possible that you my hold your shares in more than one way. 

Any documents or instructions which you need to accept the offer in respect of your different holdings will be sent to you directly by post or by email, so please read these communications carefully.

The transaction is conditional upon shareholders holding 75% of IDS shares accepting the offer, as well as certain regulatory approvals.

If the acquisition does not complete (for example, because insufficient acceptances are received), shareholders will continue to hold their shares as they do now. 

The company that looks after IDS’ shares and communication with shareholders (called the ‘share registrar’) is Equiniti. For further information about your individual shareholding, or any questions about the offer document and how to accept, you can contact a dedicated helpline Equiniti has set up for Royal Mail shareholders: +44 (0)330 123 0058.  

Understanding what this means for you and your shares

This is a complex process and we know that you have lots of questions about what the acquisition might mean for you and for the company. We have a comprehensive set of Q&A but here are the most common questions we have received:

1. What happens if I am a shareholder and want to sell my shares? 

• The process is different depending on how you hold your shares.  If you have bought shares through multiple different means – for example, though the Share Incentive Plan or as a private buyer, you may well receive more than one set of documents. You must complete all the documents relative to all your shareholdings.  
• The 360p cash payment and 8p Special Dividend will be paid to shareholders (most likely by cheque) within 14 days of the offer becoming or being declared unconditional. The offer will be unconditional once the EP Group achieves the 75% threshold and all regulatory approvals have been given.
• The 2p Final Dividend, if approved by IDS shareholders at the 2024 Annual General Meeting, is expected to be paid on 30 September 2024.

2. What happens if I want to keep my shares?

• Any shareholder wishing to retain their shares may do so and no action is necessary.
• However, if shareholders holding 75% of IDS shares accept the offer and the relevant regulatory authorities approve the proposed acquisition, the acquisition will complete. If the 75% threshold is not achieved or the regulatory approvals are not obtained, the acquisition will not go ahead.
• The EP Group already owns approximately 27.6% of IDS, which counts towards the 75% threshold. Assuming the 75% threshold is achieved, IDS is expected to be de-listed from the London Stock Exchange. 
• This means that, if the 75% threshold is reached any remaining shareholders who have not accepted the offer will become ‘minority shareholders’ in a private company and may find it difficult to sell their shares in the future.
• If shareholders holding more than 90% of the IDS shares accept, EP Group will have the right to compulsorily purchase the remaining shares at the same price.

3. What happens if the acquisition does not complete? Do I keep my shares?

• If the proposed acquisition does not complete (for example, because insufficient acceptances are received), shareholders will continue to hold their shares. Shareholders will not receive the cash payment of 360p per share and there will not be a Special Dividend of 8p per share.
• The Final Dividend of 2p per share will still be paid, provided it is approved at the 2024 Annual General Meeting

Reviewing the offer and what you need to do now

We encourage you to take the time to read and understand the documentation provided. 

We have provided resources and materials below to help you. You should also look out for any offer related documentation or communication (whether by post or email) so that you are able to make the right decision for you and take the necessary action to sell your shares, if that is what you decide. 

Let’s keep focused on delivering our plan for this year

We have made good progress with our transformation over the last few months and have come a long way thanks to you and your efforts. Whilst there may be a lot going on, it is vital that we stay focused on delivering for our customers and continue to deliver the plan.

Key information to share with colleagues

Your questions

We have prepared a Q&A document here. 

Printout of email and infographics

This printout contains all the relevant information in this email, along with the infographics and timeline. Please post this prominently on a noticeboard. 

Briefing note

Please make sure all colleagues are briefed and understand where to go for further information. This briefing note summaries the key points for colleagues and can be used for your team talk. 

Archived information

All documents and communications relating to EP Group's offer to acquire IDS can be found at: Offer from EP Group | myroyalmail