Royal Mail’s parent company International Distributions Services has rejected a takeover approach from its largest shareholder, Czech billionaire Daniel Kretinsky.

IDS, which has a market value of £2.1billion, received an offer from Kretinsky’s EP Group investment vehicle earlier this month. EPG already owns 27.5 percent of IDS and although its cash offer was rejected, it said that it wants to “engage constructively” with the British group’s board while it considers its options.

Royal Mail is in critical need of investment to modernise its structure and operations and help it fight off competitors, according to EPG.

It added that tackling the “challenging situation” facing Royal Mail would be easier if it were a privately owned company, supported by an investor that can take a long term view, without the short term focus and constant attention of the stock market.

“Weak financial performance, poor service delivery and a slow transformation, in the face of a market going through structural change, have put the business (Royal Mail) under unsustainable pressure. With the increasing competition from multinational companies ,” EPG said in a statement.

It added that it is “prepared to support this iconic business as it transforms and rebuilds into a modern postal operator delivering high quality service to its customers, stability to its workforce and sustainable financial performance”.

When IDS was privatised in 2013 it was valued at £3.3billion or 330p per share and peaked at 606p in May 2018. Since June 2021, they have lost close to two thirds of their value.

After seeing business boom during the pandemic, IDS is trying to slash its costs, especially at loss making Royal Mail. IDS says that Royal Mail at present is unsustainable due to the Universal Service Obligation, which obliges it to deliver letters and packages to every address in the UK at fixed cost.

Earlier this month, Royal Mail asked regulator Ofcom for permission to deliver second class letters and all other non-first class deliveries to every other day.

EP’s interests span Europe and range from supermarkets to logistics, media and e-commerce. Kretinsky is also a shareholder of Premier League football club West Ham.

IDS did not respond to requests for comment.