Exclusive: Royal Mail To Deliver Float
The Government is to begin sounding out City investors about their appetite to buy shares in Royal Mail ahead of a potential flotation of the postal service.
I have learned that ministers and the Shareholder Executive, the body which manages state-owned assets, have sanctioned a preliminary roadshow of major City institutions to begin in the new year.
The Government will wait until Royal Mail's Christmas trading performance is clear before commencing discussions with prospective investors.
On Tuesday, Royal Mail will unveil half-year results which are expected to show continued progress in restructuring the core UK letters division, which has seen tens of thousands of jobs axed in an attempt to secure the company's survival.
A decline in letter volumes accelerated by the explosion of the internet has only been partially offset by the growth in Royal Mail's parcels business.
Moya Greene, the Canadian chief executive of Royal Mail, is likely to confirm the plans for initial talks with City investors alongside the results.
A privatisation of Royal Mail would be arguably the most significant privatisation of a UK asset since John Major sold the railways during the 1990s.
Analysts say that a restructured Royal Mail could be worth as much as £4bn, although that figure is likely to be at the upper end of the range that a flotation could attract.
Ms Greene is also likely to reaffirm a ministerial commitment to make shares available to Royal Mail employees as well as the public.
A flotation is viewed in Whitehall as a more attractive option than an outright sale of the company because of the shortage of trade buyers and the political difficulties of negotiating a takeover by a financial investor such as a private equity firm.
Michael Fallon, the business minister, is taking a hands-on role in discussions about the potential sell-off.
Barclays is advising the board of Royal Mail, which is chaired by Donald Brydon, a leading City figure, with UBS advising the Government.
Royal Mail's finances have been knocked into shape by hiving off the company's historic pension deficit onto the taxpayer. The regulatory regime dictating stamp prices and other areas of its operations have also been loosened by Ofcom.
Royal Mail declined to comment.
what do you think?
Looks like Cameron following his idol thatcher in selling off our assets say bye bye to Royal Mail to a foreign buyer
Interesting Shirley, we could see the Chinese dragon and the ''Loyal mail'' logo on our vans !
Ha ha ha!
We will be the only country where the Post Office won't deliver to the door because it's uneconomical.
What about Australia where people in remote areas collect their mail from boxes at the local Post office in the nearest town?
Another sell off. More price rises to look forward to and a poorer service if the last round of sell offs is to go by.
Ken. No difference there then. That is exactly what we get when the publicly owned Royal Mail increase prices every April
Yes The price will be £1 before you know it
its a dead duck thats costing us more in tax payments. If its privatised its off the working man's tax paying back ! Emails etc are free, if they privatise you will see capitalist free markets in full flow....prices will come down to compete or they go bust....
Agreed Grant, let's pull ourselves out of the stilton, however achieved, as long as it's not clobbering the GENUINE disadvantaged !
Wrong. The P.O.'s parcel service is very profitable and it's this that the greedy capitalists are slobbering over and can't wait to get their greedy mitts on. Prices will rocket, all for the profit of the greedy shareholders and the service will be run into the ground - as usual with privatisation. (For further proof - look at the energy companies where 'competition' was supposed to have given us low prices.
I live in Scotland in Moray, the Post Office charge normal rates for delivery of parcels to my postcode area. How many times have I tried to buy something online with free p&p to the UK mainland only to be told that my postcode incurs a charge, since when has Moray not been part of the uk mainland. When I quiz the traders making the offer of free p&p they say it is a charge by their courier.
Chris. The Royal Mails parcel service is very profitable. Hardly surprising considering the outrageous prices they charge which are even worse for posting overseas.
Just like this ee lot. Jack up the prices pretending to be a better service. Piffle.
Many post offices are located in sweet shops or convenience stores not owned by the post office
That's because they've been shutting them down and streamlining ready for sell off
RM has to be sold off - there are rules that our country is subject to that does not allow it to be owned in the form that it currently is. No prizes for correct guesses.