Privatisation Poll in Telegraph - Your chance to vote

[TrueBlueTerrier]

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Yes 33.96% (54 votes)

No 66.04% (105 votes)

Total Votes: 159

The announcement to MPs will raise the prospect of a 'Tell Sid'-style privatisation, similar to the viral marketing campaign which led to the privatisation of British Gas in 1986.

In a speech at the end of April, Postal services minister Michael Fallon said that he was considering a flotation, or a private sale to another company, but that the Government was “attracted to an IPO”.

However Whitehall sources confirmed that he has now decided to proceed with a flotation on the London Stock Exchange.

The flotation is likely to value Royal Mail at between £2billion and £3billion. Shares are likely to be sold off in tranches to investors.

The sums raised would likely eclipse the £1.3bilion float of state defence firm Qinetiq in 2005 and the £2billion flotation of Railtrack in 1995.

The news is likely to be accompanied by an announcement of a tender for the procurement of a syndicate of banks to handle the flotation. Shares in Royal Mail will be offered for sale either this Autumn or next Spring.

Royal Mail and its City advisers are running a twin track timetable to give maximum flexibility to ministers about when to press the 'go' button on a float when market conditions are right.

Any sale to a rival like Holland’s TNT or Germany’s Deutsche Post could be controversial because of the status of Royal Mail as the UK’s national postal service.

Similarly a sale to a private equity firm is likely to be controversial with unions, which would fear attempts to strip out costs.

In April Mr Fallon stressed that he had “no intention of selling off Royal Mail cheaply”, adding: “We have not publicly speculated on Royal Mail’s value.

“We will sell shares in Royal Mail at a fair commercial price that represents value for money for the tax payer. It will be a practical, logical and commercial decision.

“And very few people now question whether the likes of BT, BP or Rolls Royce should have remained state owned.”

Ministers are likely to justify the sale on the grounds that Royal Mail needs access to private capital to continue with its modernising programme. He is known to have been impressed by the profitability of mail operators on the Continent which have been floated.
Austria Post and Deutsche Post have delivered high profit margins since their flotations, with profit margins of 22 per cent and 8 per cent in 2011/12 respectively.

He added that levels of service had remained consistently high – for example in 2012, the percentage of letters delivered next day “in
Germany and Austria was 95 per cent, compared to a 93 per cent regulatory target in the UK”.

Under law, the Government has to offer at least 10 per cent of Royal Mail’s shares will be offered to postal workers.

MPs who are close to the postal services union the Communication Workers Union are set to press Mr Fallon on whether the shares will be free for their members.

Mr Fallon said in April: “People should be in no doubt, whether the shares are discounted, or free, it is a hugely significant commitment from the Government to Royal Mail’s workers and I am determined to do the right deal for them.”

Anti-privatisation campaigners criticised the plans. Mario Dunn, Campaign Director of Save Our Royal Mail, said: “This is a privatisation for ideological reasons only. Royal Mail is a successful public sector enterprise.

“It is more than capable of sustaining itself there. Even Margaret Thatcher didn't want to sell off the post. She knew how unpopular it would be. Cuts to rural services are now inevitable.”

A spokesman for the Department of Business, Innovation and Skills said: “We intend to update Parliament before the summer Parliamentary recess.” Royal Mail declined to comment.

[fishtank]

Yes 33.67% (165 votes)
No 66.33% (325 votes)

Total Votes: 490

[borders]

makes no difference , who votes what in any poll . its going to happen and if RM is clever , a good pay deal and £2000 in FREE shares should clinch the deal. that's the world we live in I am afraid.

[Pinky 1]

Yes 30.07% (273 votes)
No 69.93% (635 votes)

Total votes: 908