Royal Mail valued at £3.3bn as sell-off imminent

The controversial privatisation of the Royal Mail has moved a step closer with the release of the expected price range for the stock.

Leader of Unite Len McCluskey

Shares are expected to be priced at between 260p and 330p, giving a market valuation of up to £3.3bn, it was announced yesterday.

Opponents attacked the decision to publish the details on the day more than 100,000 postmen and women started voting on whether to strike over the plans.

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Unions representing postal workers and managers, and the Labour Party, criticised the coalition for pressing ahead with the sell-off despite “consistent opposition” from the public and warnings of the impact on jobs and services.

The Yorkshire Post has previously reported how campaigners fear privatisation will lead to communities losing Post Offices in rural parts of the region, where vital subsidies could be lost.

Unconditional dealings in the stock will start on October 15, the day before voting closes in a ballot by the Communication Workers Union (CWU).

The union is urging its members to vote yes, with any strike action starting a week later.

Around 150,000 eligible staff will be handed 10 per cent of shares – equivalent to around £2,000 each – in the largest free stock offer of any privatisation in the UK over the past 30 years.

Billy Hayes, CWU general secretary, said: “It seems remarkable that the prospectus is being issued on the same day that postal workers are being sent ballot papers for strike action. Today’s announcement changes nothing in terms of the ballot, which will go ahead as notified.

“Royal Mail is profitable and can continue to be successful in the public sector. The sale is driven by political dogma, not economic necessity, and postal workers and the CWU will continue to fight to save services as well as defend their terms and conditions.”

Len McCluskey, general secretary of Unite, which represents Royal Mail managers, said: “Customers know and businesses know that this rushed sale is likely to lead to higher prices and could spell the death knell of the universal service which so many rural communities rely on.

“It goes where even Thatcher didn’t dare, with the Government selling off a treasured and profitable service to make a quick buck to pay for their failed handling of the economy.”

A vote at this week’s Labour Party conference opposed the sell-off and called on an incoming Labour government to renationalise a privatised Royal Mail.

Shadow business secretary Chuka Umunna said: “Royal Mail is a cherished national institution with a presence across Britain providing vital services to millions of customers every day. But out of touch ministers are putting all that at risk just so they can raise a quick buck to fill the hole left in the public finances by George Osborne’s failed economic plan.

“This is in the face of huge opposition from the public and Royal Mail’s employees and a real concern about what the sale will mean for customers and local communities.

“Having nationalised Royal Mail’s debts by taking on its pensions liability, ministers are privatising the business when it is making over £400m in profits, which makes no sense.”

The Government is expected to retain a stake in Royal Mail of between 30 per cent and 49.9 per cent, it emerged in an offer launch document published yesterday.

Business Secretary Vince Cable said it was an “important day” for the postal service.

“People can now apply to buy shares in this iconic British brand,” he added.

“This will give Royal Mail access to the private capital it needs to modernise, as envisaged under successive governments, and enshrined in law by Parliament two years ago.”

Mario Dunn, director of the Save Our Royal Mail campaign, told the Yorkshire Post earlier this month that the planned sell-off would lead to “more and more” closures in Yorkshire, which has already lost more than a third of its branches in the last decade.

“Rural areas will probably be hit harder than big urban ones because those are the ones that survive on a shoestring and rely on subsidies,” he said.

“Yorkshire has got a lot of rural areas where the Post Office is quite an important feature of rural life and economic life and it is those that are likely to be affected the most.”

The application process for shares opened yesterday and the deadline is October 8. Further pricing details and share allocations will be confirmed when conditional dealings in Royal Mail start on October 11.