Javid authorises Royal Mail sale

Published: Wednesday 10th June 2015 by The News Editor

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The Government tonight kicked off the sale of half of its remaining stake in Royal Mail but this time the shares will be sold to institutional investors rather than members of the public.

Business Secretary Sajid Javid authorised the start of an “accelerated bookbuilding” process which will see the taxpayer holding in the group cut from 30% to 15%.

But ministers were immediately criticised by Labour, who said they had failed to learn lessons from the earlier “botched fire sale” of the company.

The stock being sold off is worth about £775 million at Royal Mail’s value at the close of trading today.

The shares have risen 20% since the start of the year.

Today, they ended the session at 516.5p, more than 50% higher than they were when the rest of the company was floated in 2013 – in a controversial process, partly including a retail offer to ordinary members of the public.

Ministers at the time came under fire after the share price soared immediately, leaving investors with an instant profit at the expense of taxpayers.

Tonight a Business Department spokesman said: “The Business Secretary has today authorised a sale process to begin.

“Current market conditions represent a good opportunity to achieve value for the taxpayer.

“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 stake in Royal Mail.”

The announcement comes a week after Chancellor George Osborne announced that the Government’s remaining stake in Royal Mail would be sold off within months.

Shadow Business Secretary Chuka Umunna MP said: “It’s disgraceful the Government is rushing to dump its stake in Royal Mail to City speculators without giving ordinary investors a look in.

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

Published: Wednesday 10th June 2015 by The News Editor

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