13th Oct 2015 06:21
LONDON (Alliance News) - Royal Mail PLC on Tuesday said it has sold the majority of its 14% stake in Royal Mail for around GBP591.0 million under an accelerated bookbuilding process that was announced on Monday.
The government Tuesday said it has sold a 13% stake in Royal Mail, comprised of around 130.0 million shares, at a placing price of 455.0 pence per share, generating proceeds of GBP591.1 million.
The government owned a 14% stake in Royal Mail, leaving it with a 1% shareholding after the placing. That remaining 1% stake, comprised of around 10.0 million shares, will be "gifted" to Royal Mail employees in the UK, marking the government's final disposal of shares.
The UK government no longer holds a stake in the postal service following the transactions.
It follows on from the government raising GBP750.0 million back in June by selling a 15% stake in Royal Mail at 550.0 pence per share, significantly more than it got per share when it first floated the mail operator in a criticized initial public offering nearly two years ago at 330.0 pence per share. That June sale was also for a considerably higher price than the 455.0 pence price achieved on Tuesday.
The sale in June was open to the general public, but the latest offer was only available to institutional investors.
The stake in Royal Mail was held by Postal Services Holding Co Ltd, and was sold on behalf of the government by way of a placing to institutional investors.
Bank of America Merrill Lynch, Goldman Sachs International and J.P. Morgan Securities PLC were appointed as joint bookrunners.
The legacy postal operator still has an obligation to deliver post to every address in the country and has been going through a transformation and efficiency drive as it positions itself to cope with the burgeoning parcels market and the gradual decline in the letters market.
The Post Office, which operates the network of branches throughout the UK, remains wholly-owned by the Government and was separated from Royal Mail in April 2012. The relationship between the Post Office and Royal Mail is a commercial one and a 10 year contract for the delivery of Royal Mail services through post offices was put in place in 2012.
By Joshua Warner; [email protected]; @JoshAlliance
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