THE UK Government yesterday named its price for Royal Mail – as it presses ahead with its controversial plan to privatise the postal service.
Shares are expected to be priced at between £2.60 and £3.30, giving a market valuation of £2.6billion to £3.3billion.
The government came under attack yesterday for releasing details of the sale as more than 100,000 postmen and women started voting on whether to strike in protest.
Unconditional dealings in the stock will start on October 15 – the day before voting in the ballot closes.
Unions representing postal workers and managers criticised the coalition for pressing ahead with the sell-off despite “consistent opposition” from the public and warnings of the impact on jobs and services.
Business Secretary Vince Cable said: “People can now apply to buy shares in this iconic British brand. 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.”
The deadline for the receipt of applications is October 8. Further pricing details and share allocations will be confirmed when conditional dealings start on October 11.
Retail investors based in the UK can buy shares at a minimum of £750 and can also apply through intermediaries.
Stockbroker Hargreaves Lansdown has already reported significant interest from private investors registering for the share offer. Spokesman Richard Hunter said: “Once the prospectus is published and the share offer is open, we will see how much of this interest translates into people applying for shares. Time will be short. The share offer will close on October 8 and therefore interested investors will need to act quickly.”
Royal Mail handled more than 17billion letters and more than 1.4billion parcels during the 2012-13 financial year. Revenues were £9.1billion, with profits after restructuring costs of £403million.
Under a programme started in 2007-08, Royal Mail said it had invested £2.8billion in operational improvements.
The Post Office, which has been separate from Royal Mail since April 2012, is not for sale.