The government has today (12 October 2015) begun the process of disposing of its remaining shareholding in Royal Mail plc. The disposal of the shares will be by way of a placing to institutional investors. The government currently holds just under a 14% stake in Royal Mail, with the remaining shares held by a combination of employees and private investors.
A Department for Business spokesperson said:
The Business Secretary has today authorised a sale process to begin. Current market conditions should allow a successful sale and the realisation of value for the taxpayer.
The universal postal service is strongly protected by law and Ofcom has a duty to ensure its provision. Therefore the government sees no policy reason to retain a stake in Royal Mail.
The Post Office Ltd, which operates the network of branches throughout the UK, remains wholly owned by government and was separated from Royal Mail in April 2012. The relationship between the Post Office and Royal Mail is a commercial one and a 10 year contract for the delivery of Royal Mail services through post offices was put in place in 2012.
On 11 June 2015, the government sold c50% of its then existing stake, amounting to approximately 15% of the company, at 500p per share raising £750 million.
On 8 July 2015, the Summer Budget document stated “the government intends to complete the sale of its remaining 14% shareholding in Royal Mail by the end of 2015 to 2016, subject to achieving value for money”.
On 21 July 2015, the government published a parliamentary report explaining the gift of shares to eligible UK employees.
On 17 September 2015, 1% of the government’s shareholding was transferred to a Royal Mail Share Incentive Plan as gift to eligible UK employees to reward them for hard work in turning round the company. The shares were allocated to employees on 5 October 2015.