Royal Mail kicks off City PR pitch for 2013 privatisation

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Royal Mail has begun a review of its financial PR requirements in advance of a widely anticipated multi-billion-pound sell-off in 2013.

PRWeek understands Royal Mail is inviting the industry’s top City PR agencies to pitch for a brief to support its financial comms through a landmark privatisation process next year.

The group currently uses Brunswick, which is thought to have been invited to participate in the competitive pitch.

Earlier this month it emerged that Royal Mail’s comms boss Shane O'Riordain decided to stay at the group in an expanded role, having previously accepted a job heading comms at Australian bank Westpac.

Both Royal Mail and Brunswick declined to comment on the story.

Royal Mail is wholly owned by the Government, which is thought to finally be ready to pull the trigger on the long-mooted sell-off of the UK’s postal service.

While a straight sale to private equity or trade buyers has not been ruled out, it is though that the Government’s preferred route is a stock market float.

A listing on the London Stock Exchange could value the group at around £4bn and would catapult Royal Mail into the FTSE 100.

In its interim results in November, Royal Mail stated: ‘Preparations are now under way for the sale of Royal Mail Group. Obtaining external capital is a key part of the transformation process as we become a more parcels-focused business and make the investment in technology to do so.’

Its results for the first half of 2012 were widely seen as moving the group significantly closer to a listing.

The group reported a 12% jump in pre-tax profit to £115m, having previously transferred its large pension fund – which has £28bn of assets and £38bn in liabilities – to the state.

Last week Sky News reported that Royal Mail was in discussions with City advisers and investment banks over the privatisation deal.

The UK’s new listings market has been disappointingly quiet throughout 2012, but a Royal Mail sell-off would mark the second multi-billion-pound float by state-owned entities in as many years.

Majority Government-owned Royal Bank of Scotland floated insurance arm Direct Line in October, valuing the firm at £2.6bn.

RBS held a competitive pitch of top City agencies to handle financial PR through the process in April, eventually selecting Brunswick for the brief.