Royal Mail shares to be sold before possible strikes

[TrueBlueTerrier]

http://www.bbc.co.uk/news/business-24294745" onclick="window.open(this.href);return false;

Royal Mail shares are to be sold by mid-October, before postal workers have a chance to strike over the move.

The company is valued at £2.6bn to £3.3bn, the government said on Friday.

The Department for Business said Royal Mail would list on the London Stock Exchange next month. BBC business editor Robert Peston says that the privatisation should be complete by 15 October.

He adds that this is "long before" a possible strike could happen.

Postal workers will on Friday begin voting on whether to take industrial action to oppose the plan.

In a statement, the government said that 10% of the shares, priced between 260p and 330p, would be given to about 150,000 "eligible UK-based Royal Mail employees".

The government will also sell between 40.1% and 52.2% of the Royal Mail under its privatisation proposal.

Members of the public can apply for Royal Mail shares online until 8 October. So-called "conditional dealings" in shares on the London Stock Exchange will begin on 11 October, while "unconditional dealings" will commence on 15 October.

The minimum application for the public wishing to purchase shares is £750, or £500 for eligible Royal Mail employees.

There is perhaps a Thatcherite confrontational tint to the whole exercise, unusual for a government led by David Cameron, whose own ideological roots seem more Blairite than Iron Lady”

The government said it might also sell an additional 15% of its stake in what is called an "over-allotment" option, if the demand for shares was very high.

Business Secretary Vince Cable said: "This will give Royal Mail access to the private capital it needs to modernise, as envisaged under successive governments and enshrined in law by Parliament two years ago. "

Strikes?

Moya Greene, chief executive of Royal Mail, said that the company would "not change".

"We will now be better able to compete in what is a fast changing and intensely competitive market," she added.

The Communication Workers Union (CWU) is balloting 100,000 of its members on a nationwide strike over the privatisation, as well as on changes to salary and pensions.

The CWU on Friday in statement said it "criticised" the government for pressing ahead with what it called an "unpopular" privatisation.

CWU general secretary Billy Hayes said: "It seems remarkable that the prospectus is being issued on the same day that postal workers are being sent ballot papers for strike action."

Mr Hayes added: "Royal Mail is profitable and can continue to be successful in the public sector. The sale is driven by political dogma, not economic necessity, and postal workers and the CWU will continue to fight to save services as well as defend their terms and conditions."

Voting in the strike ballot will close on 16 October. The earliest a strike could take place is 23 October.

In the official prospectus for the share issuing, the Royal Mail warned that industrial action posed a potential risk for the share price.

The statement said: "National industrial action, or the threat of national industrial action... could also have a material adverse effect on the success of the offer and, if it occurs after admission, could cause the price of ordinary shares to fall significantly."


'Priced to sell'

Our business editor adds that this is a "very big moment" in the history of the 500-year-old postal service, describing the government's programme as "ambitious".

He adds: "Remember that industrial relations are pretty terrible at the moment, and the government's timetable for this means it is now impossible for there to be a strike before the privatisation is done. It will be in the private sector before there can be a strike."

Business minister Michael Fallon told the BBC that the six-day-a-week delivery, or "universal service", was "completely protected," but private investment would help the Royal Mail improve that service.

"It's a business that needs access to private capital," he added.

Business minister Michael Fallon: "This is a huge day for Royal Mail"

Postal economist David Stubbs told the BBC that the pricing of the shares was "low".

"Under some scenarios, this looks cheap. If the Royal Mail is able to keep its market share and to keep its industrial relations issues under control, then this pricing is low.

"It looks like the price reflects the government's desire for a quick sale."

Mr Stubbs added, however, that if there were continuing problems with its labour relations, and if competitors began to gain an advantage, the value would be less than the range given by the government on Friday.

[TrueBlueTerrier]

In the official prospectus for the share issuing, the Royal Mail warned that industrial action posed a potential risk for the share price.

The statement said: "National industrial action, or the threat of national industrial action... could also have a material adverse effect on the success of the offer and, if it occurs after admission, could cause the price of ordinary shares to fall significantly."

Its alright I've got enough reasons to strike, no need to give me anymore.

[rhino49]

So, due to the timing, prospective new owners (and no doubt new directors) will have an opportunity to see what confrontational management causes at first hand. I wonder if they will protect their new interests by trying to see the sense in working with a workforce or will part of the share purchase deal be an employers blindfold and earplug kit that they are required to wear whenever we air our views.

Although I strongly disagree with privatisation, I am not striking against it, as who actually owns Royal Mail is not the problem. The problem - and it is a big one - is that money will be moved around but nothing will change for the better, unless we have good quality terms and conditions set in stone for years to come. Having an interest in the business you work for is rewarding (I have experienced it before elsewhere), but it won't happen with a downtrodden and ignored workforce who are treated as second class citizens.

As prospective part owners we should be given more respect than that.

Never forget that the DSA companies don't do our job because they can't afford to - they only play at what we actually achieve every day and every day that we don't choose to achieve means chaos.
Soooooo ....... time to try out that old adage - grab them by the balls and their minds will follow - vote yes to strike action in support of wage, pension and terms of employment disagreements and get this company sorted out for the better.

[BIONICJAMIE]

Yet another reason to strike - and more reason to march on Sunday against the tories in Manchester 11am.
The NHS, Firefighters, Education, Bedroom tax, CUTS CUTS CUTS ! ffs

the general public need to stand up and start fighting!

[britwrit]

We "need investment" but (a) none of the money from the share sales will go to us, and (b) half of our profits next year will go - pro rata - towards paying dividends.

[UnhappyGremlin]

I already had enough reason(s) to strike.
But, it always nice to have one or two more.

[Budfrog]

CWU were far too slow out of the blocks on this issue and today's statement is proof, if proof was needed. Could there have been a different outcome if they had been more assertive and IA had started already? probably not.

For all the reasons that have been given here I am still against privatisation and believe RM could thrive as a national asset. Just a glance at how the utility companies treat us is a glimpse into RM's future with it's own customers.

So what's next? tray and make the best out of a horrendously bad job and secure some decent guaranteed T&Cs .... but we all know it won't be easy.

[NWpostie]

The Government is killing the Golden Goose, they will lose an average of £80m profit paid into the treasury instead it will be paid out to shareholders, which means our taxes will go up to make good the loss, the public need to know this.

[El-Bandito]

Michael Fallon looks like a nonse. Sorry he makes no sense. Typo

[mickeymacca]

CWU general secretary Billy Hayes said: "It seems remarkable that the prospectus is being issued on the same day that postal workers are being sent ballot papers for strike action."

No Billy " It seems remarkable that postal workers are are only just being sent ballot papers for strike action on the same day that the prospectus is being issued"

A bit harsh ?

[TrueBlueTerrier]

CWU general secretary Billy Hayes said: "It seems remarkable that the prospectus is being issued on the same day that postal workers are being sent ballot papers for strike action."

No Billy " It seems remarkable that postal workers are are only just being sent ballot papers for strike action on the same day that the prospectus is being issued"

A bit harsh ?

Possibly - the Government/Royal Mail can send the prospectus out whenever they want. For a ballot to be legal the Union have to tell Royal Mail what the timetable is.

So the Union tell RM when the ballott starts and just by chance the Government send out the prospectus on the same day.

[mickeymacca]

CWU general secretary Billy Hayes said: "It seems remarkable that the prospectus is being issued on the same day that postal workers are being sent ballot papers for strike action."

No Billy " It seems remarkable that postal workers are are only just being sent ballot papers for strike action on the same day that the prospectus is being issued"

A bit harsh ?

Possibly - the Government/Royal Mail can send the prospectus out whenever they want. For a ballot to be legal the Union have to tell Royal Mail what the timetable is.

So the Union tell RM when the ballott starts and just by chance the Government send out the prospectus on the same day.

I know, but to be fair we were told around 6 months ago the floatation would be in the autumn, so it really should not come as a great surprise that they coincide.....
I don't find it remarkable, I find it pretty understandable from the Government/ RM s point of view they want to undermine the potential for strike action what better way to do it than to make it appear like the battle is already lost. And you must admit there have been people on here that think that privatisation is already a done deal with yesterdays announcement, which is what they are hoping for.......

[fishtank]

I'm with mickey on this.
We knew that the likely timetable for privatisation was Sep/Oct at least 6 months ago.
this isn't a case of the Government hurriedly shoving out the prospectus,this is when they planned to do it.

This is a case of us taking far too long arsing about for whatever dubious reasons that will obviously be playing on the members minds now.

Should we still vote yes?,Of course we should,anything else now is self defeating but this pissing around has not helped us secure the strong Yes vote we need no matter how some try to portray it.

[vmaxv4]

This is a case of us taking far too long arsing about for whatever dubious reasons that will obviously be playing on the members minds now.

Have Billy & Dave been strung along with the premise that the labour conference would bear fruit for re-nationalisation......only to be tapped on the shoulder after an overwhelming motion by labour delegates in favour of our cause ....To say sorry lads we can't support you were weak a pis*

[UnhappyGremlin]

I'm with mickey on this.
We knew that the likely timetable for privatisation was Sep/Oct at least 6 months ago.
this isn't a case of the Government hurriedly shoving out the prospectus,this is when they planned to do it.

This is a case of us taking far too long arsing about for whatever dubious reasons that will obviously be playing on the members minds now.

Should we still vote yes?,Of course we should,anything else now is self defeating but this pissing around has not helped us secure the strong Yes vote we need no matter how some try to portray it.

Agree.
It's not like a flotation can be planned overnight, or even in a few weeks, it takes months.
Many people, especially a lot on RMC, were calling for a ballot a couple of months ago. Would it have made a difference? Don't know.
Maybe RM/The Government would have brought the timetable forward, so it still might not have mattered.
But, it would have caught them a bit off guard maybe, and then forced them to actually rush it through, and could have forced a mistake and a delay.

It does appear to me that RM have conducted the negotiations in such a manner as to delay the deal to a point where it is too late.
The union should have done something earlier. But what's done is done.
The only thing left is a big YES vote, and go from there.