The U.K. government is to sell its remaining 14 percent stake in Royal Mail Group Plc to institutional investors.
The placing of around 140 million shares is valued at about 660 million pounds ($1 billion) at their Monday closing price of
The October 2013 sale of a 60 percent stake in the former state postal service was heavily criticized for underestimating demand and so underpricing the stock. By January 2014, the shares had soared to 86 percent above their launch price of 330 pence. The stock is now 43 percent above its initial value.
“Current market conditions should allow a successful sale and the realization of value for the taxpayer,” the Department for Business said in an e-mailed statement. It said customers wouldn’t suffer. “The universal service is strongly protected by law and Ofcom has a duty to ensure its provision. Therefore the government sees no policy reason to retain a shareholding in Royal Mail.”
The gradual selloff of Royal Mail has seen about 11 percent of the shares given to staff.
Bank of America Merrill Lynch, Goldman Sachs International and J.P. Morgan Securities Plc have been appointed to act as joint bookrunners, with the book-building process beginning immediately. Rothschild is acting as capital markets adviser. Freshfields Bruckhaus Deringer LLP is acting as legal counsel.