Con-Libs yet to agree Royal Mail sale details

[POSTMAN]

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Plans to part-privatise Royal Mail will be included in the Queen’s Speech on Tuesday, despite ministers having yet to agree how much of the state-owned postal operator should be sold off, government insiders say.

The Con-Lib coalition will exclude the post office network from the sale, mirroring the approach adopted in the Labour administration’s failed legislation to part-privatise Royal Mail.

Ministers also intend to offer an as yet unspecified tranche of shares to Royal Mail employees, in a bid to soften workforce resistance to the deal. But the Communication Workers Union on Friday signalled it would resume the bitter battle to prevent the part-privatisation it waged against Lord Mandelson’s earlier plans.

The union gathers for its annual conference in Bournemouth on Sunday where the atmosphere is likely to be febrile. Billy Hayes, CWU general secretary, told the Financial Times that any form of privatisation would be “deeply unpopular” with the public.

“Making private profit out of public services is just wrong and it will come at the expense of services, jobs and price rises,” Mr Hayes said. “What Royal Mail needs now is government backing, not a return to an old fashioned discredited sell off that nobody wants.”

Lord Mandelson blamed adverse market conditions for his decision to shelve the proposed part-privatisation last summer, although the then business secretary also faced a mass revolt from Labour backbenchers.

The Lib-Con coalition should be able to get its proposed bill through parliament, given both parties support the sell-off. But it remains unclear how much the sale would achieve.

CVC Capital Partners, the London-based private equity group, appears ready to renew its bid for a minority stake in an auction, in which ministers will hope to attract interest from overseas pensions funds and sovereign wealth funds.

CVC’s bid last year for a 30 per cent stake under Labour’s abortive part-privatisation, thought to be below £2bn, fell short of what the government was seeking. But CVC has gained first-hand experience of the postal industry, having acquired stakes in the Danish and Belgian post offices.

TNT, the Dutch postal business, looks a less likely bidder this time because it is restructuring itself in the face of stiff competition. Its interest was mainly in GLS, Royal Mail’s profitable European parcels arm. An auction for GLS could attract industry bidders such as UPS and FedEx.

Germany’s Deutsche Post DHL took part in last year’s process before withdrawing, but there is no sign it is interested in a future deal.

Royal Mail’s pension deficit, due to be revalued from £3.4bn to at least £10bn next month, remains a potentially serious barrier for bidders unless the government agrees to relieve the burden. Royal Mail injected £867m into the fund last year.

[jockstrapp]

If Billy (bunter) Hayes is against privatisation THEN I'M ALL FOR IT. Anything that fat useless b@stard says then I'll vote the other way, so bring it on

[Dogs of War]

Totally agree anything the CWU says vote the other way. So bring on the 49% sale.