Singapore’s GIC Keen on Royal Mail
Reports are being issued that one of the major institutional investors interested in the initial public offering of Britain’s Royal Mail is the Government of Singapore Investment Corporation (GIC) now known as GIC Private Limited. Other keen sovereign wealth fund investors include the Kuwait Investment Authority (through the Kuwait Investment Office) and the Abu Dhabi Investment Authority.
The UK government still plans to hold around a 30% – 49.9% stake in the national mail carrier and also plans on issuing a 10% stake to its over 150,000 employees.
Offers are currently being made to institutional and retail investors. The UK government expects roughly 70% of allocations will be made to institutional investors including public pensions and sovereign wealth funds.
Royal Mail has enjoyed a successful turnaround story under the leadership of CEO Moya Greene. According to reports, the 497-year-old postal service doubled its operating profit to £430 million this past year versus the year prior.
Additionally, it appears an attractive purchase by yield-hungry investors as the UK government has posted a possible dividend yield of between 6.1% and 7.7%.
The purchase, if carried out, would represent a continuance in the trend among the GIC in investing in listed UK equities. The Sovereign Wealth Fund Transaction Database has recorded a significant number of transactions by the GIC in UK equity.
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