Full privatisation of postal service

Government ‘ditches Lazard’ in sale of Royal Mail shares

Royal MailUpdate: George Osborne, the Chancellor, is said to have dumped investment bank Lazard for the forthcoming sale of Royal Mail shares following its handling of the initial privatisation process.

Ministers had to suffer accusations of underpricing Royal Mail in 2013. Lazard, which led the IPO, was also accused of being conflicted when its asset management arm made £8million by selling shares while its bank received £1.5m in advisory fees.

The Government has appointed Rothschild for the sale of its remaining 30% stake in a move that will be closely watched by those who criticised the government for selling its initial tranche too cheaply.

Mr Osborne has given no timeline for the sale of its holding, which is currently valued at about £1.5 billion.

The privatisation of Royal Mail, which began with a sale of shares in October 2013, has been controversial, having evaded numerous governments, both Labour and Conservative.

The sale eventually went ahead after a charm offensive to win over the trade unions. Employees now own 10% of the shares on the market.

But ministers came in for criticism when institutions made a killing as the shares soared from their 330p flotation price to 600p. They now trade at about 515p.

Mr Osborne told MPs: “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.”

The sale is part of a plan to raise money and cut spending in order to bring down the public deficit.

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