40,000 people denied a stake in RM

[TrueBlueTerrier]

40,000 people denied a stake in Royal Mail as City institutions clean up

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Tens of thousands of people who tried to buy shares in Royal Mail’s privatisation will get nothing at all, it has emerged.

That contrasted with large City institutions, some of which are foreign-owned and postmen who look set to announce strike plans next week who received shares.

The news will provoke a furious reaction among private investors who have been spurned in the first Government flotation for eight years.

The Treasury will also get a short term boost by being allowed, under the terms of the flotation, to hang on to billions of pounds of cash from unsuccessful bids for shares for another 10 days. In all £30billion was bid by private and City investors for just £3billion-worth of shares.

But Vince Cable, the Business secretary, said: “We have struck the right balance, increasing the proportion of shares going to small investors to ensure they get their fair share and ensuring the employees get a 10 per cent stake in the business.”

But analysts said investors would be left frustrated. Gert Zonneveld, from Panmure Gordon, said: “There will be quite a lot of disappointed people out there.”

Labour said the sale showed “Royal Mail is being sold off on the cheap with taxpayers being short changed to the tune of hundreds of millions of pounds”.

Chuka Umunna, the shadow Business secretary, said that the fact that the sale was oversubscribed many times over “only serves to underline worries that ministers have got it badly wrong, with only a minority of shares going to small investors”.
The Government is initially floating just over half of the value of the company, with a further 10 per cent stake being allocated free to nearly 150,000 staff.

In all, 730,000 members of the public bid for more than £750-worth of shares in Royal Mail before Tuesday’s deadline.

Of those bidders, 690,000 people were allocated equally £749.10 worth of shares, worth £3.30 each, valuing Royal Mail at £3billion.
However it admitted that up to 40,000 investors who bid for chunks worth more than £10,000 in the flotation will get nothing at all. In contrast, 300 of the 800 City institutions succeed in applying for stock.

The fact that so many people are missing out contrasts with a guarantee from Michael Fallon, the Business minister in charge of the flotation, that everyone who applied would get their “fair share”.

This was taken to mean that everyone who applied would get the minimum share allocation of £750 each.
Ministers were keen only to attract investors and pension funds which agreed to invest for the long term. It is likely that some are foreign investors.

Royal Mail workers who applied for shares received their applications worth up to £10,000 in full, the Government said.
The Communication Workers Union, which represents around 120,000 Royal Mail staff, are set to vote to strike over pensions and working conditions next week.

Moya Greene, Royal Mail’s chief executive, said: “It is gratifying that Royal Mail enjoys the confidence of such a strong group of investors.

“With these institutions, many of whom are responsible for people’s pensions and savings, and with UK citizens and our own people backing Royal Mail, we are much better positioned to be the universal service provider for the country.”
The controversial share allocation plan was signed off by David Cameron, the Prime Minister, and Nick Clegg, the Deputy Prime Minister on Thursday.

They had considered a plan to give an allocation to all 730,000 retail investors but rejected it after concluding higher bidders would not want the smaller stakes on offer.

One Downing Street source said that ministers had decided that “people who bid for more than £10,000 might not be interested in a few hundred pounds-worth of share”.

Ministers also increased the proportion of shares made available to retail investors from 30 per cent to 33 per cent of the shares being sold to cope with demand.

In contrast 300 City institutions, including City stalwarts such as Threadneedle, Blackrock, Fidelity and Standard Life are in the RM share register, were allocated the remaining 67 per cent of shares. Some are known to be overseas.

The Government also said that Royal Mail workers who applied for shares received their applications worth up to £10,000 in full.
That comes before members of the Communication Workers Union are set to vote in favour of a strike over privatisation, pay and pensions.

Conditional trading in Royal Mail’s shares, when small investors who bought stock through a broker, starts on Saturday morning.
People who bought shares directly through the Government’s website can trade from next Tuesday as long as they have proof of the stock they have been allocated.

The popularity of the float – which was 20 times oversubscribed by pension funds and institutions – has given the Treasury a short term boost.

Retail investors offered to pay £3.5billion for only £500million worth of shares. The Government now has to repay any unspent cash on October 21 – and can keep any interest made on the sums in the meantime.

[Shambles]

40,000 .....Crash and Burn, even before take off

Shame

[Chelseablue]

See the postman bragging on the news bout his bought shares

[biscuit1957]

Singapore got theirs,according to city analist in 3 years when the government sell their stake it is open to foreign postal services like Deutch post,we know what that means,job cuts

[Godric]

booo hoo hoo ... my heart bleeds for them ... not!! .... f**king vultures

[UnhappyGremlin]

Well, that's made me smile.

[baldrick]

Rich barstewards who can afford to buy more than £10k worth, but still want to grab every penny they can, greedy Tory c@~*?s.

[taxi4leighton]

whatabout the 40+million who cant afford to buy shares?.lots cant even afford to heat their house!.welcome to a tory lead u.k.

[Shambles]

well said