Royal Mail to be sold

Royal Mail shares are now available for sale either online or through an intermediary or through a paper application pack from the Post Office. Each share is being sold at the price of between 260 pence and 330 pence.

Royal Mail Ownershiproyal mail

Up to 150,000 eligible UK-based Royal Mail employees will own 10% of the shares.

The offer comprises between 401 million (40.1%) and 522 million (52.2.%) shares that will be sold to private investors and the general public under the privatisation proposal. The minimum application for the public wishing to purchase shares will be £750 and £500 for Royal Mail employees.

The government’s holding in Royal Mail is expected to be between approximately 37.8% and 49.9%.

The last day for application is 8 October 2013.

Vince Cable, Business Secretary, said: “Today is an important day in the life of Royal Mail: people can now apply to buy shares in this iconic British brand.”

The privatisation won’t affect the Post Office as it is a separate company.

Why is Royal Mail being privatised?

Royal Mail is in need of private capital to invest in innovation, capture opportunities in new markets and compete with other players. The increase in online shopping means increase in the number of parcel deliveries. Similarly, with the convenience of email, delivery of letters has decreased.

The controversies

The Communication Workers Union (CWU) represents the non-managerial staff of the Royal Mail.

Billy Hayes, CWU general secretary said, “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.”

1 Comment

Filed under Finance, UK

One response to “Royal Mail to be sold

  1. jamesosbiston

    hi Anjali – i’ve just put together a research piece outlining the details and business case for the ipo – might be of interest.

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