4th Jun 2015 12:33
LONDON (Alliance News) - UK Chancellor George Osborne on Thursday said the government will sell its remaining stake in Royal Mail PLC and has appointed investment bank Rothschild to advise on the deal.
The Department for Business, Innovation and Skills said the government holds a 30% stake in the FTSE 100-listed company, currently valued at around GBP1.5 billion, which was listed in October 2013.
Shares in Royal Mail surged higher following its float in 2013, prompting a long-running row between the previous Coalition government and critics over whether the shares had been priced too cheaply and resulted in taxpayers missing out on an extra windfall.
Royal Mail, which appointed Peter Long as its chairman-designate earlier this week, last month posted higher profit for the financial year to March 29 as cost-cutting measures in the UK offset lower-than-expected revenue in its parcels business.
Chancellor George Osborne, addressing MPs as part of the Queen's Speech debate on the economy, said the government will start to sell down the shares this year. The government holds a 30% stake in Royal Mail, with the remaining 70% owned by a combination of employees, who own 10%, and private investors.
"The transaction will be designed to deliver best value for money to the taxpayer, with further detail on the form of the sale to be announced in due course," the Department for Business said in a statement.
The Department for Business is led by Sajid Javid, a Conservative who replaced Vince Cable after the Liberal Democrat lost his seat in the UK General Election.
"I am today announcing that the government will begin selling the remaining 30% shareholding we have in the Royal Mail. It is the right thing to do for the Royal Mail, the businesses and families who depend on it ? and crucially for the taxpayer," said Osborne.
Royal Mail shares were down 2.4% to 513.61 pence on Thursday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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