Royal Mail to launch stock market flotation within hours

[TrueBlueTerrier]

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Ministers have been putting the finishing touches to the launch of the Royal Mail flotation, the most ambitious privatisation for a generation, amid fierce criticism from its closest rival.

An announcement detailing the plans is due to be made to the stock market at 7am on Thursday, following a Royal Mail board meeting on Wednesday evening.

The company has also lined up borrowing facilities totalling £1.4bn, Sky News reported.

Royal Mail chief executive Moya Greene will meet 1,200 union representatives at a private meeting in Birmingham at 11am on Thursday in a last-ditch bid to win their support for the move and avert a crippling nationwide strike in the run-up to Christmas.

A ballot for industrial action by the Communication Workers Union (CWU) is expected to be launched next week after union officials give formal notice of their plans for a vote tomorrow.

Royal Mail’s biggest rival, TNT Post, has criticised the Government’s plan to privatise the postal operator as “preposterous”.

Chief executive Nick Wells said: “Royal Mail needs access to capital for its modernisation plans. However, privatising a monopoly is bad for consumers, bad for business and bad for UK Plc.”

He added: “We are not against privatisation per se but we need a level playing field. It would be outrageous to privatise a Royal Mail that has a 20pc VAT advantage.”

Ministers are committed to privatising Royal Mail by April next year. It is expected to be valued at £3bn and a flotation could take place as early as mid-October.

The float is seen by Business Secretary Vince Cable and business minister Michael Fallon as vital to drawing in the funds necessary to securing the future of the postal operator.

The company’s 150,000 staff have been promised a 10pc stake in the business, roughly equal to £2,000 each at a valuation of £3bn.
The Government is set to confirm on Thursday that the public will be able to buy shares in Royal Mail. Sources say the public may take up as much as a quarter of the shares on offer.

The Government is also expected to commit Royal Mail to paying out hundreds of millions of pounds in dividends to shareholders in a bid to secure City support for the privatisation.

A spokesman for Royal Mail said: “Royal Mail is honoured to provide the Universal Service to more than 29 million addresses across the UK. The Universal Service is enshrined in law through the Postal Services Act 2011.

"The six-days-a-week, one-price-goes-anywhere, affordable service can only be changed by both Houses of Parliament. “

[speckledtangerine]

It's a fait accompli. The fact investors have come out immediately chomping at the bit to scoop up shares shows two things: firstly, the board of RM and the coalition have played a blinder. They've kept us completely in the dark without any leaks which leads to the second point. The Union (and Labour) have been caught with their pants round their ankles. Slow to respond, half added platitudes, completely behind the curve and totally outflanked.

This battle is over before it has even begun.

[UnhappyGremlin]

Royal Mail’s biggest rival, TNT Post, has criticised the Government’s plan to privatise the postal operator as “preposterous”.

Even TNT know it's wrong. Though for different reasons.

A spokesman for Royal Mail said: “Royal Mail is honoured to provide the Universal Service to more than 29 million addresses across the UK. The Universal Service is enshrined in law through the Postal Services Act 2011.
"The six-days-a-week, one-price-goes-anywhere, affordable service can only be changed by both Houses of Parliament. “

And it will be, within a decade maximum.