The coalition government aims to begin the privatization of Royal Mail by selling or floating at least part of it in autumn 2013 if the state-owned postal operator’s finances continue to improve.
The sell-off would be Britain’s most ambitious privatization since John Major broke up and sold the railways in the 1990s. Analysts think Royal Mail could be worth up to £3 billion-£4 billion.
The government is attracted to a stock market flotation if the financial climate for initial public offerings improves, according to people close to the sale process. Options are also open for a sale to an industry or private equity buyer.
A flotation is likely to involve a sale of shares to the public as well as institutions, backed by a marketing effort like the 1986 “Tell Sid” campaign to sell British Gas.
“We see no reason why this company should not be IPO-able,” said one senior insider. “Royal Mail is viewed with a high level of affection by the public. That could easily play well into an IPO situation.”
Privatization is likely to begin with a partial sell-off, with the rest sold later, but a full sale at the outset is not ruled out. Royal Mail employees would get a stake of at least 10 percent when privatization is completed. The Post Office network would remain in the public sector and may be mutilated.Page 1 of 3 | Next Page