British Government Begins Sale of Remaining Royal Mail Stake

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The British government’s 30 percent stake in Royal Mail is now worth about 1.5 billion pounds, or $2.3 billion. Peter Macdiarmid/Getty Images
LONDON — The British government said on Wednesday that it had begun the process of selling its remaining stake in the Royal Mail, which went public less than two years ago.
The Department for Business, Innovation and Skills will sell 150 million shares, or about a 15 percent stake, to institutional investors in a secondary offering that is expected to price on Thursday.
The government holds a 30 percent stake after an initial public offering of stock for Royal Mail, which operates Britain’s postal service, in October 2013. The government’s stake is estimated to be worth about 1.5 billion pounds, or about $2.3 billion.
The Treasury announced plans last week to sell the remaining stake. It will hold a 15 percent interest after the latest sale.
“Current market conditions represent a good opportunity to achieve value for the taxpayer,” a Department for Business representative said in a news release.
The government is expected to use the proceeds to reduce its debt. George Osborne, chancellor of the Exchequer, announced measures last week to reduce the government’s debt by £4.5 billion.
The government raised £1.98 billion in the I.P.O. in October 2013, which was 24 times oversubscribed.
But it has been criticized for taking a cautious approach in the sale and not achieving a higher price after shares jumped 38 percent on the first day of trading.
Separately, Mr. Osborne said on Wednesday that the government planned to award up to an additional 1 percent of Royal Mail’s shares to its employees, who received 10 percent of the company’s shares when it went public.
“We’re also going to make sure that there is a special bonus for the work force who have done such a great job turning Royal Mail around,” Mr. Osborne said in a speech on Wednesday night. “Thanks to them, Royal Mail’s share price has risen; so we’re going to give more of the shares to the staff.”
Shares of Royal Mail closed about 57 percent above its I.P.O. price of 330 pence in London on Wednesday.
Bank of America Merrill Lynch, Goldman Sachs and JPMorgan Chase are serving as bookrunners on the offering. Rothschild is advising the government on the sale.