LONDON, May 28 (Reuters) - Royal Mail's parent company, International Distributions Services (IDS), is set to recommend a firm offer by Czech billionaire Daniel Kretinsky, a person with knowledge of the situation said.

An announcement is expected on the fate of the bid for one of the world's oldest postal companies before a May 29 deadline under UK takeover rules.

Earlier this month Kretinsky's investment vehicle EP Group improved its bid for the shares he doesn't already own in IDS to 370 pence each, after an earlier bid of 320 pence was rejected by the London-listed firm. Kretinsky owns 27.6% of the company, according to LSEG data.

The agreed deal is set to come with some commitments for the future of the business, according to the person, who spoke on condition of anonymity because the process is private.

IDS and a representative for EP Group declined to comment. The BBC earlier reported that the board of the company that owns Royal Mail was expected to recommend a fresh takeover offer for the organisation on Wednesday.

IDS, which owns Royal Mail and the international parcels network GLS, was valued at 3.08 billion pounds ($3.93 billion) on Tuesday, with its shares closing at 321.2 pence.

The board of IDS said earlier this month that it was "minded to recommend" the offer price of 370 pence a share, which it described as fair.

Last week IDS posted a

narrower pre-tax annual loss

and announced a special dividend. It reported a loss before tax of 75 million pounds for the year ended March 2024, compared to a loss before tax of 110 million pounds, reported last year.

($1 = 0.7837 pounds) (Reporting by Amy-Jo Crowley; Additional reporting by Jan Lopatka; Writing by Anousha Sakoui; Editing by Leslie Adler)