Government raises £591m selling off final Royal Mail shareholding

The Government has sold off a 13 per cent stake in Royal Mail, and gifted the remaining 1 per cent it owned to postal service employees, reports The Telegraph.

The overnight sale has raised £591.1m, bringing the Government’s total proceeds from the sell-off of Royal Mail to £3.3bn. The postal service is now fully in private hands for the first time in its 500-year history.

“This is a truly historic day for Royal Mail with the workers gaining a share of this history,” said Sajid Javid, business secretary. “We have delivered on our promise to sell the Government’s entire remaining stake which means that for the very first time the company is now wholly owned by its employees and private investors. This is the right step for the Royal Mail, its customers and the taxpayer.

“Proceeds will also go to help pay off the national debt – a crucial part of our long-term plan to provide economic security for working people.”

Shares were sold at 455p in a process known as an “accelerated book build” to institutional investors only, with retail investors unable to buy stock.

Around 143,000 Royal Mail staff will benefit from the 1 per cent share gift, gaining 70 shares each at a value of around £318. As with previous share awards, they will have to wait three years before they can cash them in.

Employees now own around 12 per cent of the postal service.

The 499-year-old postal service was privatised in October 2013, but the 38pc rise in its share price on its first day on the stock market led to accusations that the Government had sold it off too cheaply.
Royal Mail was floated at 330p a share, and stood at 526p in early January. It has since fallen to close at 471.2p on Monday.

The Chancellor George Osborne has been exiting the Government’s stake in Royal Mail this year as he looks to raise a total of £1.5bn, as part of a £4.5bn debt reduction plan.

A sale of a 15 per cent holding, at 500p in June, raised £750m, and last month a 1 per cent shareholding was transferred to the Royal Mail Share Incentive Plan.

“This is a milestone moment in the long and proud history of the Royal Mail, when we secure its long-term future,” said Mr Osborne. “By fully leaving state ownership we have a win all round – for customers, the workforce and the taxpayer.

“Once again, we are also going to recognise the hard work of the staff who have done a great job in turning the company around, and give them a 1pc stake to share between them.”

The Government says it does not need to hold shares in Royal Mail, as the universal postal service is protected by law and by Ofcom.

The Post Office, which operates the network of branches throughout the UK, remains wholly owned by government and was separated from Royal Mail in April 2012.