Royal Mail shares to be sold mid-Oct
Target date implies floatation would take place before a planned postal strike
By CFOWorld.co.uk staff | CFO UK | Published 11:51, 27 September 13
Shares in Royal Mail are to be sold on the London Stock Exchange by mid-October, well before postal workers have a chance to strike over the move.
In a statement on Friday, the UK Department for Business, Innovation and Skills (BIS) said Royal Mail’s initial valuation is likely to be in the range of £2.6 billion to £3.3 billion, with a completion date for privatisation set for 15 October.
The department also said that 10 percent of the shares, priced between 260 pence and 330 pence, would be given to around 150,000 "eligible UK-based Royal Mail employees". Members of the public can apply for Royal Mail sharesonline until 8 October. Conditional dealings in shares will begin on 11 October, while unconditional dealings will commence on 15 October.
The minimum application for the public wishing to purchase shares is £750 or £500 for eligible Royal Mail employees. The government will sell between 40.1 percent and 52.2 percent of Royal Mail under its privatisation proposal.
Business Secretary Vince Cable said, "This will give Royal Mail access to the private capital it needs to modernise, as envisaged under successive governments and enshrined in law by Parliament two years ago."
Moya Greene, chief executive of Royal Mail, said, "We will now be better able to compete in what is a fast changing and intensely competitive market," she added.
Postal workers’ representatives at the Communication Workers Union (CWU) are currently balloting 100,000 members on a nationwide strike over the privatisation, as well as on changes to salary and pensions. Voting in the strike ballot will close on 16 October, which means the earliest a strike could take place is 23 October.
CWU general secretary Billy Hayes said, "It seems remarkable that the prospectus is being issued on the same day that postal workers are being sent ballot papers for strike action."
"Royal Mail is profitable and can continue to be successful in the public sector. The sale is driven by political dogma, not economic necessity, and postal workers and the CWU will continue to fight to save services as well as defend their terms and conditions," he added.
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