The UK today completed the historic £3.3 billion privatisation of Royal Mail by disposing of its remaining 14% holding in the company which is now fully owned by investors and employees.
The government sold a 13% stake for 455 pence per share to institutional investors, raising £591.1 million. The remaining 1% of shares will be gifted to Royal Mail’s eligible UK employees, taking the total stake in the business owned by employees to 12% while investors own 88%.
The final tranche sale means that £3.3 billion has been raised in total through the IPO in October 2013 and subsequent share sales. London raised £2 billion from the initial placement, which saw investors buy 60% of shares and a further 10% go to employees. On June 11 this year the government then sold half of its remaining holding for 500 pence per share, raising £750 million.
UK Business Secretary Sajid Javid said: “This is a truly historic day for Royal Mail with the workers gaining a share of this history. 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.”
Chancellor of the Exchequer George Osborne said: “This is a milestone moment in the long and proud history of the Royal Mail, when we secure its long term future. By fully leaving state ownership we have a win all round – for customers, the workforce and the taxpayer. And every penny will be used to pay down our national debt as we continue to bring our public finances under control.
“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 1% stake to share between them.”
The government explained there is no policy need for government to hold shares in Royal Mail “as the universal postal service remains well protected by law and by Ofcom”, the postal regulator.
Royal Mail did not comment officially on the final stage of privatisation but the postal union CWU responded to the share sale by labelling it “a disgrace”.
CWU general secretary Dave Ward declared: "The remaining government share in this profitable company should have been used to safeguard the public's voice in Royal Mail and ensure the continuation of daily deliveries to every address in the country. The Tories have instead chosen an ideological course that puts the fundamental ethos of a centuries old national institution in jeopardy.”
CWU deputy general secretary (postal) Terry Pullinger added: "Selling off the final 14% of Royal Mail threatens the very existence of the one price goes anywhere, six day delivery service that is one of the great inventions of our social history.
"When the first part of this privatisation was completed by the Coalition we were told that this was because Royal Mail needed private capital to invest in its future – but if you ask the workforce they have seen hardly any new investment, witnessing instead the worst type of short-term investors making a killing without any regard to the long term future of the company or the services it provides to the public.
"The CWU will continue to campaign against unfair competition and the race to the bottom, which privatisation inevitably brings. Both existing, and any new shareholders should be in no doubt – any attempt to undermine our legally binding agreements, terms and conditions, job security or the six day delivery Universal Service Obligation will be defended by us by all means possible including, if necessary, strike action,” Pullinger warned.
