Royal Mail Holdings plc Privatization Moves Closer
United 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.
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