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Royal Mail Holdings plc Privatization Moves Closer

Royal_MailUnited Kingdom government officials announced Goldman Sachs and UBS AG will command a syndicate of banks for the £3 billion privatization of state-owned postal service Royal Mail Holdings plc. Other banks involved include Bank of America Merrill Lynch and Barclays. Past experience with Royal Mail was a factor in banker selection. The banks plan to collect around £30 million in fees. In the deal, postal workers would get a 10% stake.

Royal Mail is directly owned by the Department of Trade and Industry. Officials from the Secretary of State for Business, Innovation and Skills (BIS) mentioned that they negotiated hard to get the maximum value for UK taxpayers.

According to the Sovereign Wealth Fund Institute, the United Kingdom is a major recipient of direct sovereign wealth fund investment.

Direct sovereign wealth investment in the UK surpasses Spain, France and Italy. Sovereign wealth funds and other foreign investors could invest in Royal Mail. Monopolistic characteristics and strong cash flows attract long-term institutional investors.

The flotation would make the 497-year old Royal Mail one of the biggest and oldest companies on the FTSE. It would be the largest privatization in England since selling the railways in the 1990s.

Qatar Central Bank Deals with MSCI

MSCI, a stock index company whose benchmarks influence investor behavior, has tremendous indirect power impacting the stock markets of smaller economies. In 1988, MSCI released its emerging markets index, a now-widely-used benchmark for many institutional investors wanting access to growth markets. China and South Korea make up the majority of the benchmark, but smaller economies such as Poland, Chile and even Qatar make up other pieces of it.

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bcIMC Buys into Bottling Business with PAI in €1.623 Billion Takeover of Refresco

Dutch soft-drink bottler Refresco Group N.V. has agreed to a buyout offer for all 81.2 million of its shares from French private equity firm PAI Partners SAS (PAI) and Canadian pension manager British Columbia Investment Management Corporation (bcIMC) in exchange for €20 in cash per ordinary share for a total consideration of €1.623 billion. Refresco’s major shareholders, which includes 3i Group, and shareholding members of its boards, who represent 26.5% of outstanding shares, have said they stand behind the deal.

Refresco’s board rejected an initial offer from PAI in April 2017 of €1.4 billion, which they felt did not adequately capture the value added by their plans to bolster its presence in North America through the acquisition of Canadian bottler Cott TB, a deal that went through in July for US$ 1.25 billion.

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Digital Insurance Distributor BGL Opts for CPPIB Money Over IPO

Canada Pension Plan Investment Board (CPPIB) is investing £675 million (US$ 895.715 million) for a 30% stake in Peterborough-based BGL Group, a digital distributor of insurance and household financial services to 8.5 million customers. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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