- Stake priced at 455 pence, a discount on Monday's close
- Final 10 million shares to be given to Royal Mail employees
The U.K. government unloaded its final stake in Royal Mail Plc, completing the privatization of the postal service in two years as Chancellor of the Exchequer George Osborne pushes to reduce the nation’s debt.
A 13 percent stake was sold for 455 pence a share, 3.6 percent below Monday’s close, generating proceeds of 591.1 million pounds ($908 million), the Department for Business, Innovation and Skills said in a statement Tuesday. The government’s final 10 million shares will be given to Royal Mail employees, raising the stake held by workers to 12 percent, according to the former state postal service.
The completion of Royal Mail’s privatization is a “milestone moment,” Osborne said in a tweet. It’s the “right thing to do for Royal Mail workforce, customers and the taxpayer” and “every penny will be used to pay down national debt.”
The U.K. government’s initial sale of a 60 percent stake in October 2013 was criticized for underestimating demand and therefore underpricing the company. By January 2014, the stock had soared 86 percent above its launch price of 330 pence. A 15 percent Royal Mail stake was sold in June for 500 pence a share.
Royal Mail stock fell as much as 4.9 percent to 449 pence and was about that level at 9:01 a.m. in London. Shares of the nearly 500-year-old postal company have risen 4.4 percent this year, valuing it at 4.49 billion pounds.
Bank of America Merrill Lynch, Goldman Sachs International and J.P. Morgan Securities Plc acted as joint bookrunners, with Rothschild acting as capital markets adviser. Freshfields Bruckhaus Deringer LLP provided legal counsel.