The UK government unloaded its final stake in Royal Mail, completing the privatisation of the postal service in two years as chancellor of the exchequer George Osborne pushes to reduce the nation's debt.
A 13 per cent stake was sold for 455 pence a share, 3.6 per cent below Monday’s close, generating proceeds of £591.1 million pounds (€792 million), the Department for Business, Innovation and Skills said in a statement on Tuesday.
The government’s final 10 million shares will be given to Royal Mail employees, raising the stake held by workers to 12 per cent, according to the former state postal service.
The completion of Royal Mail’s privatisation is a “milestone moment”, Osborne said in a tweet. It’s the “right thing to do for Royal Mail workforce, customers and the taxpayer” and “every penny will be used to pay down national debt.”
The UK government’s initial sale of a 60 per cent stake in October 2013 was criticised for underestimating demand and therefore under-pricing the company.
By January 2014, the stock had soared 86 per cent above its launch price of 330 pence. A 15 per cent Royal Mail stake was sold in June for 500 pence a share.
Royal Mail stock fell as much as 4.9 per cent to 449 pence and was about that level at 9am in London.
Shares of the nearly 500-year-old postal company have risen 4.4 per cent this year, valuing it at £4.49 billion.
Bank of America, Merrill Lynch, Goldman Sachs International and JP Morgan Securities acted as joint bookrunners, with Rothschild acting as capital markets adviser.
