May 15 (Reuters) - International Distributions Services said on Wednesday Czech billionaire Daniel Kretinsky's investment vehicle EP Group has raised its proposal to buy the owner of Royal Mail, valuing it at about 3.5 billion pounds ($4.42 billion).

The sweetened proposal values IDS at 370 pence per share, representing a premium of about 73% to IDS share price before the initial bid was made public last month.

IDS in April had rejected Kretinsky's bid for 320 pence a share, saying it "significantly undervalues IDS and its future prospects". ($1 = 0.7911 pounds) (Reporting by Yadarisa Shabong in Bengaluru; Editing by Arun Koyyur)