Fury as 750m RM shares sold overnight to City fatcats

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Fury as £750m Royal Mail shares sold overnight to City fatcats with no offer to ordinary voters

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Labour claims the sell-off echoes the 'botched fire sale' of 2013 after George Osborne announced it to top City bankers in a black bow tie

Rush: Osborne revealed the sale to City bankers last night - and it's already finished
The government has sold 150 million Royal Mail shares overnight to City fatcats - without giving ordinary voters a chance to buy them.

Labour has reacted with fury to the move, with shadow business secretary Chuka Umunna claiming it echoes the first 'botched fire sale' in 2013.

Addressing top City bankers last night in a black bow tie, George Osborne revealed the sale had already started and the £750m proceeds will be put towards the national debt.

Just hours later, the entire stake up for sale - 15% of the company - has been sold under the direction of investment banks Merrill Lynch, Goldman Sachs and J.P. Morgan.

It comes just hours after the Chancellor revealed taxpayers will lose more than £7bn as he sells the government's share of bailed-out bank RBS.

Fatcats: The speech was at the Lord Mayor's Dinner for the Bankers and Merchants of the City
A Department for Business, Innovation & Skills spokesman said Royal Mail's shares were sold for the current market price of 500p each.

The price is below this year's peak of 524p and well below the overall peak of 604p in January last year, a difference which would add up to more than £100m.

Instead of being offered to ordinary household investors, the shares have all been sold to 'institutional investors'.

The identities of the firms aren't being confirmed by the government.

Business Secretary Sajid Javid will reveal more details of the sale today in the Commons.


"This sale has raised £750 million and represents good value for taxpayers," he insisted.

"Royal Mail has demonstrated that it can thrive in the private sector.

"It now has the ability to access the funds it needs to ensure that it has a sustainable future and can adapt to the changes in the postal market.

"The universal postal service remains well protected by law and by Ofcom."

But Labour shadow business secretary Chuka Umunna blasted the 'rushed' move - just weeks after the government vowed to wait until the time was right.


"It's disgraceful the Government is rushing to dump its stake in Royal Mail to City speculators without giving ordinary investors a look in," he said.

"The Government does not seem to have learnt the lessons from their initial botched fire sale of the Royal Mail."

The government now owns just 15% of the once-nationalised company, and that stake will be sold off soon.

Last night George Osborne pledged a 'special bonus' for Royal Mail staff who have 'done such a great job turning Royal Mail around'.

The bonus will be 1% of the company's shares, worth £50m, and will add to the 10% already given to employees in the last sale in 2013.

Employees have to own at least 10% of the company unless the government changes the law.

The first £2bn sale was slammed after the government undervalued Royal Mail to the tune of a £180m loss to taxpayers.

It sold for just 330p a share in October 2013 and just three months later the value of the former state asset had almost doubled.

It's not fallen close to that value since - and investors will be keeping a close eye on the stock market today to see how business leaders react.