LONDON: Britain’s Royal Mail will be valued at £3.3bn ($5.3bn) when it launches on the stock market in a controversial part-privatisation, the government said yesterday.
The offer price was set at 330 pence per share, which was at the top of the expected range of between 300-330 pence, it said.
British Prime Minister David Cameron said he wanted the privatisation to be a piece of “popular capitalism” that would also allow Royal Mail to invest in the business.
One third of the stake has been allocated to retail investors—excluding shares being given to employees—while the remainder will be sold to institutional investors, such as pension funds, insurers and hedge funds.
The government’s future holding in Royal Mail will be reduced to 37.8 percent. Employees will receive 10 percent of the shares free of charge, as previously stated.
Full trading of the shares on the London Stock Exchange will start on October 15.
The government’s Business Secretary Vince Cable, a Liberal Democrat, stressed that the deal would preserve the Royal Mail’s one-price-goes-anywhere universal postal service. “Our priority has always been protection of the consumer through the universal service obligation, good value for money for the taxpayer, and a stable long term ownership structure that will enable Royal Mail to be a successful enterprise and to raise commercial funding to invest. This listing achieves all of these objectives,” Cable said.
All retail investors who applied for between the £750 minimum and £10,000 worth of shares will meanwhile receive 227 shares worth £749.10. That means that more than 690,000 members of the public, or almost 95 percent of people who applied, will pick up stock.
afp
