Will the Royal Mail still be “royal” if it is owned by a Czech billionaire? That’s not to attack Daniel Křetínský, whose company, International Distributions Services, already owns 27 per cent of the company and is bidding to buy the rest.

While the deal has to get regulatory approval, it has been accepted by the Royal Mail board so, in some form or other, looks like it’s going through. But a lot of people here are going to wonder whether it is really such a great idea having so many UK enterprises owned by foreign entities.

It hasn’t turned out very well for Thames Water, and while we are quite capable of creating our own disasters – look at the Government-owned Post Office – even the enthusiasts for Britain being “open for business” must wonder whether the country isn’t a little bit too open sometimes.

So why is this happening? Why do foreign business owners see opportunities that UK investors apparently can’t? There is no easy answer, but we can pick out some elements of the puzzle.

The starting point is that UK assets are cheap by world standards. That is a huge generalisation of course, but there are objective measures of the value of companies that support this view.

The simplest of all is the price/earnings ratio of big companies on the stock exchanges, the ratio between the value of all the shares of the company and its annual earnings or profits. In very round numbers, shares in London have been trading at around 11 times earnings, while in Paris and Frankfurt they are 12 to 13 times earnings, and in New York it’s more than 20 times.

Now, you can argue that the prospects for US enterprises are better than UK or European ones, but even allowing for that, most analysts accept that London-quoted companies are undervalued.

Just why that should be so is hotly debated. Part of the explanation is that British pension funds and insurance companies........

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