TheChek News Flow

Křetínský faces tightrope as he tries to transform Royal Mail

Czech tycoon’s concessions could make the tricky task of turning a troubled legacy business into a modern postal service more daunting

For the first time in five centuries, the Royal Mail is out of British hands after ministers approved its sale to Daniel Křetínský, known as the “Czech Sphinx”.

While the £5.3bn deal was struck in May, the final agreement only came on Monday after Křetínský’s EP Group gave fresh commitments to the government including a new “golden share” giving ministers a veto over attempts to move the group’s tax status or headquarters abroad.

In order to push through the purchase of the iconic brand, the Czech tycoon, who already has investments in UK supermarket chain J Sainsbury and football club West Ham United, also struck a separate deal with unions including the Communication Workers Union.

This includes promises to pay a 10 per cent share of dividends into an employee investment trust, to hold regular meetings with the union on the future of the business, and not to raid the pension surplus unless it is reinvesting in the business, according to people familiar with the matter.

The pledges could now make a tricky task ahead even more daunting: transforming a troubled legacy business into a profitable, modern postal service.

The concessions, which helped EP Group overcome initial union and government resistance to the deal, point to the difficult tightrope the billionaire must walk as owner of a historic brand that employs close to 140,000 workers and provides a vital public service.

If unions now have a “role in any changes to working practices, that would potentially make it a bit harder for” EP Group to carry out its plans, said Alexander Paterson, an analyst at Peel Hunt.

Royal Mail’s shifting ownership has been a long, twisting journey which began in 2003 when the market for postal deliveries was first opened to competition.

In 2013, the coalition government sold 60 per cent of the business for £2bn in a listing on the London Stock Exchange, before offloading the rest of its stake two years later.

At first the shares spiked, prompting accusations the business was sold on the cheap. Yet since then the share price of Royal Mail’s owner, now renamed International Distribution Services, has slumped as the company struggled to make money or offer punctual deliveries in an increasingly competitive market.

The leadership of Royal Mail, which has gone through four CEOs since privatisation, has been criticised for failing to adapt quickly to the rise of online shopping, or reassure workers as the business was threatened by the entrance of gig economy rivals.

The business hit a new low in 2022, when postal workers went on strike for 18 days in the lead up to the Christmas shopping period.

Management eventually reached a deal with the union to adapt working shifts, in return for higher pay, but not before retailers had rushed to send parcels through rivals.

Royal Mail, still the UK’s leading delivery group, saw its market share drop from 34 to 25 per cent in two years to 2022, according to analysis group Pitney Bowes.

During the most recent full year to March, IDS returned to profit following a £742mn operating loss the previous 12 months. But this was only thanks to the £280mn profit generated by its international parcel business GLS, which compensated for Royal Mail’s £254mn loss.

Křetínský warned that Royal Mail was facing a “deadly downward spiral” this year, as he set out his ambition to invest in the growing parcel market, including lockers for online deliveries. 

But he will be taking over a business that has struggled to modernise while meeting costly legacy obligations as the country’s de facto postal service.

Under its “universal service obligation” (USO), Royal Mail is the only delivery group required to deliver letters anywhere in the country, from the Isle of Wight to the Shetland Isles, at the same cost every day besides Sunday. 

But Royal Mail’s owner is seeking regulatory approval to end second-class letter deliveries on Saturdays.

In a concession to the government, Křetínský agreed to respect the USO for as long as his business owns Royal Mail, extending a previous commitment to only do so for five years. 

But the deal only emphasised his commitment to six-day deliveries for first-class letters, as well as the “one-price-goes anywhere” service. Royal Mail’s call to cut second-class deliveries is under review by regulator Ofcom, which is set to make a decision next year.

In the original May offer, the Czech billionaire said he would keep Royal Mail’s headquarters and tax residency in the UK for five years. 

That pledge has now been eclipsed by a stronger “golden share” of the sort that the British government has kept in other nationally significant privatised businesses such as BAE Systems and Rolls-Royce. 

The golden share — which has no time limit — will still apply if the business is sold by EP Group. It is designed to ensure that without ministerial approval, the Royal Mail headquarters cannot be moved abroad and it will not be able to change where it pays its taxes. 

The agreement says the golden share restrictions could be lifted only in “very limited exceptions”: where the government imposes taxes on Royal Mail which would be “unfair and inequitable.”

The deal now also says that if any part of the business is listed — before the end of 2029 — it would have to have its primary listing in London.

CWU general secretary Dave Ward said the union’s preferred option was renationalisation but added that for the first time since privatisation, the government was going to take a role in Royal Mail. “In the circumstances that Royal Mail is facing, this is the best option. It puts Křetínský in a place where he has got to work with us,” he said.

Nevertheless, during a House of Commons debate on Monday, some MPs expressed misgivings about whether the deal could eventually lead to the erosion of the USO.

Sir Edward Leigh, a Tory MP, said: “What we are all worried about is that, as this moves ever further away from public ownership, that the new private owner may try to chip away from the universal service obligation, particularly in rural areas.”

Křetínský has always maintained that he is not planning to break up the business. However, despite extending his commitments to the government and workers, as well as maintaining the principle of a USO, he has not given ground in a similar way on another closely watched pledge.

The tycoon has kept his undertaking to hold the profitable GLS business for only three years: a move that analysts have said could create a substantial windfall for the billionaire. 

With GLS generating all the profits for owner IDS, union leaders have opposed a split of the business. CWU general secretary Dave Ward warned this year that the union was prepared to strike if the takeover led to a break-up.

Křetínský has made other concessions to his new workforce that Ward welcomed as part of a “groundbreaking agreement”- including the employee investment trust.

Around 20,000 recent employees recruited on inferior employment terms will see these brought in line with more experienced staff, while 11,000 temporary workers will also have the option to become full-time, Ward said.

The fresh commitment from Křetínský contains “significant financial safeguards”, including a five-year block on the new owners taking money out of the company if the business is not in a “robust, financially sustainable position”.

Paterson at Peel Hunt said the commitments suggest “the intention of the acquisition isn’t to asset strip [Royal Mail] but to invest in it and make it a more competitive group that can grow in what should be a growing parcels market.”

According to Bloomberg’s Mark Gurman, Apple is aiming to release its first foldable in 2028. Gurman describes it as “something akin to a giant iPad that unfolds into the size of two iPad Pros side-by-side.”

Rumors about an Apple foldable have been off and on for years, but according to Bloomberg, Apple is finally zoning in on one product, one that’ll release in a few years.

The report also states that Apple wants to avoid creases on its devices, and that’s been a large focus during development. The crease is nearly invisible currently, but Apple has yet to eliminate it entirely:

When unfolded, this display will apparently be around 20 inches or so. Gurman describes it as a “single, uninterrupted piece of glass.” It’s also described as a “higher-end device.”

Apple appears to be focusing its foldable strategy on creating much larger screens that fit in your backpack, rather than offering a suboptimal tablet experience for your pocket.

When addressing the operating system, Gurman suggests that the product will likely run a version of iPadOS. However, there’s one interesting detail here:

It’s unclear whether or not this is just speculation from Gurman, but the possibility of running Mac apps on this foldable iPad (and potentially other iPads as well) is quite exciting!

As for foldable iPhones, the company is exploring the idea, though we might not see it until 2026 at the absolute earliest.

Japan’s SoftBank pledges $100bn investment in US

Vow by Masayoshi Son’s investment vehicle is latest sign of how groups are seeking to woo Donald Trump

Japan’s SoftBank on Monday unveiled plans to invest $100bn and create 100,000 jobs in the US, in the latest sign of how companies are rushing to ingratiate themselves with Donald Trump.

Masayoshi Son, SoftBank’s billionaire chief executive, stood next to President-elect Trump at Mar-a-Lago on Monday as the duo formally announce the plans.

“I would really like to celebrate the great victory of President Trump,” Son said, adding that he was “excited” by the planned investment and also hoped that Trump would “ bring the world into peace again”.

Trump called Son a “brilliant guy” and said the planned investment was “ a monumental demonstration of confidence in America’s future. “It will help ensure that artificial intelligence, emerging technologies and other industries tomorrow are built, created and grown right here in the USA,” Trump said.

The maverick investor, who made a similar move after Trump won the presidential election in 2016, will pledge to create AI-focused jobs and infrastructure projects, including those focused on chips and data centres, said people briefed on the investment plan.

Son’s announcement comes as US technology groups, led by Amazon and Meta, have moved to make big donations to the fund for Trump’s inauguration in January — signalling corporate America’s efforts to curry favour with the incoming president. 

Trump has vowed to spur investment in the US with a mix of low taxes and deregulation — and even promised to expedite regulatory approvals for companies that plough $1bn or more into the US economy.  Howard Lutnick, his nominee to be commerce secretary, also attended the event with Son on Monday.

Investors hope the plans will boost the world’s biggest economy, a bet that has prompted strong inflows into US stocks since November’s election and sent equities zooming higher.

But his plans to impose sweeping tariffs on imports from around the world, his expected crackdown on immigration and his rollback of other manufacturing incentives enacted during Joe Biden’s administration threaten to undermine his pro-growth efforts, analysts say.

It is unclear how Son, who is known for his lofty pronouncements, will be able to fund his $100bn investment pledge. He similarly vowed to inject $50bn into the US economy and create 50,000 jobs following Trump’s 2016 election win. A person familiar with the plans said the size of the latest investment could be subject to change.

Son in 2016 raised $100bn through the SoftBank Vision Fund, with the support of Saudi Arabia. That cash backed a variety of US tech companies, including Uber and WeWork, but it is unclear exactly how many jobs it created over the four-year period. 

This time Son is likely to use his chip design company Arm, which is the crown jewel of the Vision Fund, as the vehicle to create jobs and invest in AI more broadly. 

It’s likely some companies are in for a bumpy ride despite Elon Musk’s influence in the White House

From the amazing success Elon Musk has had in cosying up to Donald Trump, it would be easy to think the next US administration is going to be the most tech-friendly ever. But watching the key appointments in Washington over the past few weeks, it feels to me like some parts of Big Tech are still in for a bumpy ride.

Musk certainly has the president-elect’s ear, and he’s brought other techies into Washington on his coattails. His techno-libertarianism seems to be resonating with Republicans, some of whom seem overawed by his star power, and Trump has toned down his criticism of electric cars and expressed awe of SpaceX’s rockets. 

But staffing decisions show that incoming vice-president JD Vance is likely to be a strong voice on tech policy, and his populist approach sets up an uneasy balance with Musk. Vance was a protégé of venture capitalist Peter Thiel, who has been outspoken at times in his criticism of the biggest tech companies (he called Google’s relationship with China treasonous). Add in the deep distrust in the Republican party towards Big Tech, and it’s likely some companies are in for a tough time.

Not that Silicon Valley hasn’t had plenty to cheer about. That includes last week’s news that Federal Trade Commission chair Lina Khan will be replaced. Her attempt to shape a more activist US approach to antitrust was despised by tech leaders across the board, whatever their political leaning.

The person picked to replace her, Andrew Ferguson, has been more open to the idea of mergers. He also doesn’t believe in regulating artificial intelligence. Take those two positions together, and a consolidation in the AI industry may be coming (think Microsoft buying OpenAI and Amazon picking up Anthropic).

On the other hand, Ferguson has been more wary of the monopoly power of Big Tech, so it’s likely he’ll press ahead with the FTC’s cases against Amazon and Meta. And over at the Department of Justice, which has cases against Google and Apple, the opposition looks even stronger. Gail Slater, who’s been named to run the antitrust division, is an experienced competition lawyer and, most recently, an adviser to Vance.

That said, Slater’s likely boss at the DoJ, attorney-general nominee Pam Bondi, might moderate the agency’s zeal on antitrust. The lobbying firm Bondi worked for, Ballard Partners, represented Google and Amazon.

Vance’s influence can also be seen in the naming earlier this month of venture capitalist and podcast host David Sacks as the new administration’s main adviser on AI and crypto. Just before his appointment, Sacks called on his podcast for Google to be broken up.  

The other important factor in all of this is the deep Republican distrust of Big Tech over claims of censorship. Ferguson seems much more passionate about this issue than about matters to do with tech competition.

Trump signed an executive order late in his first term that was designed to limit the legal protections tech companies have when they moderate content. Ferguson could very well use that to go after Google and Facebook, arguing that they have lied to their users that they were taking a balanced approach to content moderation when in fact they were politically bias.

The early test of all of this is going to be how the White House deals with Google, the company most in the crosshairs on both antitrust and alleged censorship. A judge found that the company maintained an illegal monopoly on search in the first Big Tech antitrust decision and is due to rule next summer on a DoJ effort to force it to sell off its Chrome browser, among other stringent penalties.

In normal circumstances, with a more business-friendly Republican administration, you might expect a quick settlement of the case. That’s what happened in 2001, when the new Bush administration ended the government’s effort to break up Microsoft.

But there will be influential voices in and around the administration pressing for harsh penalties. If Republicans believe that Google is politically biased against them and fear its future influence, then using antitrust law to try to cut it down to size would be one way to deal with the problem.

Rana, how does it feel to you? I know you’ve been very much in favour of Khan’s efforts to breathe life into moribund US antitrust policy. Do you reckon the cases against Big Tech will roll on, or are they off the hook?

London-based firm shuts fund after struggling to raise money from investors

Bluebell Capital Partners is closing its five-year-old activist hedge fund after struggling to raise funds from investors despite targeting big European companies in a series of high-profile campaigns. 

London-based Bluebell, which launched activist campaigns at companies including BP, Richemont and GSK, is giving back capital to external investors and will restructure itself, co-founder Marco Taricco told the Financial Times. 

“The commingled fund was too small,” said Taricco. “Fundraising is bloody difficult. Ours is a niche strategy.” 

The fund reached €100mn-€200mn of assets under management but its founders decided to close it after it failed to expand further. “It’s not worthwhile in terms of the economics,” said Taricco. “Once you pay the team and pay for the cost of the infrastructure you’ve put in place, you’re left with very little.”

Bluebell will still pursue activist bets through co-investments and advisory mandates, Taricco said.

The commingled fund, a vehicle that combines money from multiple investors, had gained about 8 per cent a year since launch, investors said. News of its closure was first reported by Bloomberg. 

Bluebell began life as an advisory firm, Bluebell Partners, in 2014. It was set up by Taricco and Giuseppe Bivona, who met at Columbia Business School in New York decades earlier. 

In this previous incarnation, the pair sold investment ideas to well-known activists such as Paul Singer’s Elliott Management and Jana Partners.

They would back the ideas with their own money alongside their larger partners’ investment, whilst also negotiating a profit-sharing arrangement. They worked with Elliott in Italian transportation company Ansaldo STS and with Jana at luxury retailer Tiffany. 

In 2019 the duo set up Bluebell Capital Partners with Francesco Trapani, the former chief executive of Italian jeweller Bvlgari, and launched the hedge fund in November of that year.

Bluebell’s fund ran a highly-concentrated portfolio, focusing on medium-sized and large companies. It took only a small financial stake but often teamed up with much bigger players to amplify its voice in activist situations.

Its first campaign was at Italian bank Monte dei Paschi di Siena, and in 2021 Bluebell became the public face of a campaign at French consumer goods group Danone, despite owning less than €20mn of shares in the company. The campaign eventually led to the ousting of Danone chief executive Emmanuel Faber. 

Not all of Bluebell’s campaigns have been successful. BlackRock saw off Bluebell’s proxy challenge to its founder Larry Fink’s dual role as chair and chief executive of the world’s largest asset manager.

In September 2022, Richemont shareholders rejected Bluebell’s campaign to shake up the board of the Swiss luxury group, handing a victory to billionaire founder Johann Rupert.

This year Bluebell has called on oil major BP to ditch its commitment to cut oil and gas output and to change other key parts of its strategy to transform the company into a clean energy provider.

It was also one of a number of top shareholders who called on FTSE 100 consumer giant Reckitt to separate the company’s hygiene and health divisions from its nutrition business.

Juicyway, an African fintech that leverages stablecoin technology to power fast and cheap cross-border payments, is launching out of stealth after processing over $1 billion in transaction volume for thousands of African businesses over the last three years.

The fintech claims to have processed over 25,000 transactions, generating $1.3 billion in total payment volume (TPV) from 4,000 users. These transactions are powered by stablecoin technology at their core. According to its founders, the fintech racked up these numbers with no publicly available app or marketing efforts.

Instead, the fintech grew organically, acquiring a similar business with thousands of customers (including Andela, where one of its founders previously worked as an executive) and relying on word-of-mouth referrals.

It’s only now launching publicly after operating in stealth for three years and acquiring prominent customers such as corporates Bolt, IHS; fintechs like Piggyvest, Bamboo, and Afriex; and energy and logistics company Mocoh SA.

One customer type for a cross-border payments platform would be a remittance business that allows users in, say, the U.S. to send money to Nigeria. Such a business uses Juicyway (a not-very-fintech name for a fintech) to inject liquidity and decide the prices at which it wants to exchange its funds, in this case, dollars, for Nigerian naira. After the conversion, the remittance business can distribute the converted funds to its customers.

Traditional international and cross-border payments platforms have facilitated such a process for years. However, a new wave of platforms powered by stablecoin technology is challenging these conventional methods across developed and emerging markets.

Rather than directly transferring fiat currencies, these platforms use cash deposited in U.S. bank accounts to purchase stablecoins like USDC or USDT on behalf of users. These stablecoins are then sent to users’ digital wallets, where they can either hold the cryptocurrency or exchange it for their local currency, offering a faster, more flexible, and often cheaper alternative.

As executives at Andela, an African-born but global marketplace for technical talent, and Bamboo, one of Africa’s largest retail stock brokerages, Justin Ziegler and Ife Johnson, respectively, saw firsthand the challenges their former employers faced when moving money across borders despite the numerous cross-border solutions in the market.

Ziegler shared that despite Andela’s success and raising hundreds of millions of dollars, bringing those funds into the continent for operations proved tricky.

“It didn’t make sense that even though loads of solutions existed, they didn’t hit at the problem in a way that a Bamboo or Octa could trust,” added Johnson (Juicyway’s CEO) in an interview.

“On a personal level, I’ve also felt this disparity. Without access to American banking or platforms like Juicyway, as someone born and raised in Africa, I wouldn’t be able to participate in the global economy, you know, as free as I currently do.”

These shared frustrations gave way to Juicyway, which the founders say is doing as Johnson describes: increasing African participation in the global economy. The platform, announcing a $3 million pre-seed round, allows individuals and businesses to send, receive, and process payments globally, supporting fiat currencies and cryptocurrency transactions.

Providing liquidity to businesses

Africa contributes less than 1% to the $5 trillion global currency market, partly because there’s no liquidity for intra-African currency pairs. Juicyway provides customers access to liquidity pools for local and international payments and foreign exchange through its web and mobile apps, as well as APIs covering currencies like Nigeria’s naira, USD, GBP, and CAD.

The stablecoin platform displays real-time rates based on what others are willing to pay, fostering a “liquid ecosystem” where competition and transparent pricing lower remittance costs. Market-driven pricing is critical to Juicyway’s operations in Nigeria’s volatile economy. The startup runs Naira Rates, the country’s largest price discovery engine for the naira, with nearly 500,000 Twitter followers relying on it to track foreign exchange rates.

In addition, Juicyway offers multicurrency-insured accounts for transactions facilitated by partners like Access Bank in Nigeria for remittance services; stablecoin infra startup Bridge, which Stripe is in talks to acquire, to move, store, and accept stablecoins, and Lead Bank, a major fintech partner bank in the U.S., to provide virtual dollar accounts for its customers.

While crypto and stablecoin technology offers clear advantages in reducing costs and speeding up settlements, such partnerships are necessary to maintain compliance and manage risk. Therefore, to strengthen compliance, Juicyway hired Joshua Wasserman, a former FDIC bank examiner and Cash App compliance leader and collaborates with Sumsub for advanced KYC, KYB, and KYT processes, allowing the creation of transaction limits and tracking anomalies in user behavior to prevent fraud and money laundering, the founders said.

Also, Juicyway understands the partner risk involved as a fintech relying on partners in light of the recent Synapse debacle and is actively discussing with other banks and payment processing platforms, according to Johnson.

“One way we’ve managed to stay ahead in navigating complex financial operations is by clearly separating the roles of our principal custodians and payment processors rather than relying on one entity to handle both. However, what I’ve described right now is not foolproof, so we’re also diversifying our banking partners and payment processors in those markets,” the CEO said.

The fintech’s revenues come from processing and payment fees. Its take rates range from 0.2% to 10% on certain transactions. Moving forward, it’ll look to generate additional revenue from earning interest on customer balances, Johnson said on the call.

Two months ago, Yellow Card, a startup leveraging stablecoin technology to assist over 30,000 businesses in Africa and beyond with payments and treasury management, raised $33 million from several investors including BlockChain Capital. It’s part of a growing wave of startups, including Conduit, that are applying stablecoin tech to cross-border payments across Africa and other emerging markets. It’s unclear if other players like YC-backed Waza and Verto use stablecoins; however, their overlap in cross-border payments puts them in competition for the same market.

While Johnson views these startups as partners in an evolving cross-border payment ecosystem, he thinks Juicyway contrasts itself at the stablecoin orchestration layer, focusing on meeting customer needs at both the supply and demand ends. “Our single and biggest North Star is increasing the access of Africans to the global economy, and it shapes how we make decisions,” said the executive. “What that means for us is that we’re heavily product- and compliance-led, more than we can be finance-led.”

Like other platforms issuing or using stablecoin technology, Juicyway has had to acquire money transmitter licenses to operate – in its case, across the U.S., the U.K., Canada and Nigeria – given the regulatory ambiguity surrounding crypto and stablecoin issuance and usage globally. Over the next few years, the three-year-old fintech might acquire similar licenses in other African countries as it looks to become the platform where Africans and those doing business on the continent can easily convert African currencies to local ones and back.

Early-stage African investor P1 Ventures led the pre-seed round with participation from Ventures Platform, Future Africa, Magic Fund, Microtraction and other angel investors.