The government has given a formal notice to the stock exchange for floating the near 500-year-old state-owned Royal Mail.
The float, widely speculated to value the postal service at £3bn, will proceed “in the coming weeks”.
Employees are expected to get 10% of the shares which includes 150,000 free shares for UK-based employees. These employees will be able to apply for additional shares under an “employee priority offer”. The minimum amount employees can apply for will be £500.
The rest of the shares will be open for institutional investors and members of the public. The minimum amount members of the public can apply for will be £750.
Announcing the plans, the government said it will “retain flexibility around the size of the stake to be sold”, and that “the objective to ensure that value for money for the taxpayer is achieved”.
Communication Workers Union (CWU), which opposes the float, will launch a ballot for industrial action, the outcome of which will be announced on 3 October. The proposed date for a strike is 10 October.
Speaking about the float, business secretary Vince Cable said: “This is an important day for the Royal Mail, its employees and its customers. HM Government is taking action to secure a healthy future for the Company. These measures will help ensure the long term sustainability of the six days a week, one-price-goes-anywhere universal postal service.”
Richard Hunter, head of equities, Hargreaves Lansdown, said: “The Government has announced its intention to float Royal Mail plc on the UK stock market. If the offer goes ahead private investors should be able to purchase Royal Mail plc shares through a nominee account, ISA or SIPP.”
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