UK ministers prepare to launch Royal Mail float

[TrueBlueTerrier]

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Ministers are close to giving the go-ahead for a stock market flotation of Royal Mail, which could value the company at up to £3bn in the most ambitious privatisation since John Major sold off the railways in the 1990s.

A formal announcement of the intention to float could come as early as this week, although no final decision has been made. “Preparations are proceeding at pace,” a government official said.


Ministers appear not to have been put off by the threat of strikes by the Communication Workers’ Union, which plans to ballot members on industrial action over pay and job security in an attempt to thwart the sell-off.

George Osborne, the chancellor, is also planning an even larger fundraising – the sale of about £5bn of shares in Lloyds Banking Group.

The Royal Mail flotation could take place in mid-October. The government has said it wants to sell a majority of the company, but has yet to specify the percentage it will offer.

The company’s 150,000 staff have been promised a 10 per cent stake in the business, equal to £2,000 each if the company is valued at £3bn.

The public would be able to buy shares in a retail offer, available through stockbrokers and direct from the government via a special website.

The retail offer will be seen by some as harking back to the glory days of privatisation of the gas, electricity and telecoms industries under Margaret Thatcher in the 1980s.

The marketing campaign, however, is likely to be less aggressive than the “Tell Sid” adverts of the 1980s for shares in British Gas. It will involve newspaper and possibly online ads but no television.

Advisers expect the public to take up at least a quarter of the shares on offer, although there will be no minimum target, unlike in the big privatisations of the past.

Royal Mail’s financial performance has improved markedly under Moya Greene, its Canadian chief executive. Pre-tax profit was up 60 per cent at £324m in the past year, while revenues rose 5 per cent to £9.15bn. But analysts say it still has a long way to go to match the efficiency of some foreign operators.

Royal Mail, which is still negotiating with the CWU, has offered an 8.6 per cent rise in basic pay over three years and a legally binding contract to protect pay and conditions over that period. But the union has been holding out for a 10-year agreement.

[UnhappyGremlin]

Still ignoring the public at large.
Two thirds are against it.
They are trying to force this through ASAP.
Because if they don't, it is more likely to be stopped.

[pants123]

this government,, are supposed to represent the public, and carry out the public's interest... but this government is a dictatorship.... and i'm embarrassed by this government... nothing more than a twisted, self important, all money for the rich while screwing over this country to feed themselves with money...

hitler was a a better leader to his people than this government....... Tory scum..

[johno47]

They need the revenue from the sale to use towards making themselves look good when the next election comes, it has nothing to do with making RM a better business its all about revenue, they have already used the £28 billion they robbed our pension fund of, it just makes the economy look better so as to convince the morons who voted for them last time to keep them in power, and judging by the opposition and the Leader of the opposition they have got against them they will get back in.

[Budfrog]

They need the revenue from the sale to use towards making themselves look good when the next election comes, it has nothing to do with making RM a better business its all about revenue, they have already used the £28 billion they robbed our pension fund of, it just makes the economy look better so as to convince the morons who voted for them last time to keep them in power, and judging by the opposition and the Leader of the opposition they have got against them they will get back in.

It has never been about doing what is best for Royal Mail, the majority of it's employees or the customer and no amount of spin from Moya or the Tories will convince me otherwise. The so called turnaround in RM's fortunes has been achieved on the back of massive hikes in postal prices, the offloading of the pension liability (which they have still managed to f**k up) and the sale of RM real estate as a result of MC/DO closures. There have been savings from increased efficiency which are mostly down to the hard work of OPGs ...

[worktotime]

They need the revenue from the sale to use towards making themselves look good when the next election comes, it has nothing to do with making RM a better business its all about revenue, they have already used the £28 billion they robbed our pension fund of, it just makes the economy look better so as to convince the morons who voted for them last time to keep them in power, and judging by the opposition and the Leader of the opposition they have got against them they will get back in.

It has never been about doing what is best for Royal Mail, the majority of it's employees or the customer and no amount of spin from Moya or the Tories will convince me otherwise. The so called turnaround in RM's fortunes has been achieved on the back of massive hikes in postal prices, the offloading of the pension liability (which they have still managed to f**k up) and the sale of RM real estate as a result of MC/DO closures. There have been savings from increased efficiency which are mostly down to the hard work of OPGs ...

well said

[UnhappyGremlin]

They need the revenue from the sale to use towards making themselves look good when the next election comes, it has nothing to do with making RM a better business its all about revenue, they have already used the £28 billion they robbed our pension fund of, it just makes the economy look better so as to convince the morons who voted for them last time to keep them in power, and judging by the opposition and the Leader of the opposition they have got against them they will get back in.

It has never been about doing what is best for Royal Mail, the majority of it's employees or the customer and no amount of spin from Moya or the Tories will convince me otherwise. The so called turnaround in RM's fortunes has been achieved on the back of massive hikes in postal prices, the offloading of the pension liability (which they have still managed to f**k up) and the sale of RM real estate as a result of MC/DO closures. There have been savings from increased efficiency which are mostly down to the hard work of OPGs ...

And if they manage to privatise RM, these types of things will only increase by a huge proportion.
As well as al the rest of the crap that goes along with privatisation.

[dvbuk55]

Yes well it must be worthwhile because I had yet another letter from Moyas' gang today extolling the virtues of a huge payrise on a three year deal with terms and conditions, legally binding of course - well what could possibly go wrong.

[UnhappyGremlin]

Yes well it must be worthwhile because I had yet another letter from Moyas' gang today extolling the virtues of a huge payrise on a three year deal with terms and conditions, legally binding of course - well what could possibly go wrong.

And another ear-bashing in WTLL from RM(P)TV, telling us, for the 476th time about how good the deal is, and how unreasonable the CWU are in balloting for IA.
And I expect the next letter reiterating the crap, YET AGAIN, will be arriving shortly.