Government sells final shares in Royal Mail for £591m

The Government now holds just under a 14% stake in Royal Mail, with the remaining shares held by a combination of employees and private investors.

The stake was 13% of the overall share of Royal Mail, whilst in a gesture of goodwill a remaining 1% stake was gifted to eligible Royal Mail staff in the UK.

The United Kingdom government’s initial sale of a 60 percent stake in October 2013 was criticized for underestimating demand and therefore underpricing the company. “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 placing price was 455p per share, resulting in proceeds from the sale of the placing shares of £591.1mln. This is the right step for the Royal Mail, its customers and the taxpayer.

Proceeds of the sale will go towards paying off the national debt. Its second stake sale was in June, where the government raised around £750m by selling a 15% stake.

It was the last stake in Royal Mail to be sold off in a controversial privatisation that has poured £3.3billion into Treasury coffers.

Mr Osborne said today: “This is a milestone moment in the long and proud history of the Royal Mail, when we secure its long-term future”. Shares debuted at 330p, but skyrocketed to over 600p at the beginning of 2014.

The Communication Workers Union said the move was a “disgrace”.

July 8, 2015: the Summer Budget document stated “the Government intends to complete the sale of its remaining 14 per cent shareholding in Royal Mail by the end of 2015-16, subject to achieving value for money”.

‘By their actions today they have made it abundantly clear that they are only interested in privatisation dogma and making the rich richer – even when their actions place public services at risk. The two institutions are linked by at ten year contract signed in 2012 that says that Royal Mail will deliver through Post Office services.