The Royal Mail has begun life as a fully privatised postal company, after the Government sold off its remaining 14% stake overnight.
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At 455p per share today’s share sale wasn’t priced quite so low, but that’s still at a 3.6% discount compared with yesterday’s closing price.
The government said on Tuesday that it completed the disposal of a 13 percent stake through an accelerated book building process to institutional investors at a placing price of 455 pence.
“Every penny will be used to pay down national debt”, Osborne added in a tweet.
“Once again, we are also going to recognise the hard work of the staff who have done a great job in turning the company around, and give them a one per cent stake to share between them”.
The Communication Workers Union said the move was a “disgrace”. This is the right step for the Royal Mail, its customers and the taxpayer.
The previous coalition government was heavily criticised in 2014 after a report revealed that the government made £180m less from the £2bn sale of Royal Mail in 2013 than it could have.
A spokesperson for the Department of Business, Innovation and Skills noted: “Current market conditions should allow a successful sale and the realization of value for the taxpayer”. A 15 per cent Royal Mail stake was sold in June for 500 pence a share.
The Government argues that there is no need for it to hold shares in Royal Mail as the universal postal services remains well protected by law and by the regulator Ofcom.
“Where there is no longer a strong policy reason for continued public ownership, or where there is potential for an asset to operate more sensibly and efficiently in the private sector, the government will continue to look into the potential sale of public sector assets, ” he further stated.
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‘The Tories have instead chosen an ideological course that puts the fundamental ethos of a centuries-old national institution in jeopardy’.
