David Cameron plans to build on M with more sell-offs

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David Cameron plans to build on Royal Mail with more sell-offs http://www.ft.com/cms/s/0/a6cd613a-380a ... z2iMKoY0XX" onclick="window.open(this.href);return false;

Undeterred by accusations it sold Royal Mail shares on the cheap – on Friday the stock rose to 502.5p against an offer price of 330p – the government is considering accelerating a sale of the state’s residual stake in the 500-year-old postal operator.

This could come as early as next summer, after the publication of year-end results in May. At today’s prices, the 30 per cent rump of the company would be worth about £1.5bn.

The biggest planned privatisation of all before the election – the disposal of the taxpayer’s remaining £17bn stake in Lloyds Banking Group – could see more than half the shares go to retail investors, according to people close to the matter.

Bankers have sketched out a plan that could see the remaining Lloyds shares sold in two stages – the first potentially in February next year for an estimated £7bn – with an even bigger £10bn offer towards the end of 2014, just months before the election.

People close to Mr Cameron say the prime minister views the Royal Mail sale as “a reminder of how popular these things are”.

The government is now also considering offering retail investors a stake in the state-owned Urenco uranium enrichment company, as part of a sale that could raise up to £3bn for the Treasury.

The sell-off of up to £45.6bn of student loans has also moved a step closer with the appointment of two investment banks to advise on a potential deal.

Aides to George Osborne say the chancellor is unrepentant about the Royal Mail sale and that the public response – some 700,000 people applied for shares – “reinforced” the case for selling Lloyds shares to the public next year.

“We are now looking actively at a retail offer for the next tranche,” Mr Osborne told the Daily Telegraph this weekend.

Retail investors may be given access to the £7bn tranche, which could happen any time from mid-December when a current lock-up agreement expires. But bankers said it was likely to be principally marketed to institutional investors.

The portion of the reprivatisation process scheduled for the end of 2014, potentially worth about £10bn, was more likely to be marketed specifically as a retail transaction, bankers said.

If all goes well for Lloyds over the coming months, with profits recovering and regulators allowing the bank to restart dividend payments, it could then appeal to a wide swath of the British public.

Royal Bank of Scotland’s rehabilitation, however, remains more difficult and it unlikely to be reprivatised before 2015.