£10bn price tag fuels Royal Mail row

Claims that Royal Mail was sold off “on the cheap” have gained credibility after it was revealed that banking giant JP Morgan believed the company could have been worth up to £10bn – three times what the Government sold it for.
The revelation has reignited the row about whether the Government rushed to sell off the postal service – handing big profits to City investors – with Business Secretary Vince Cable admitting that threats of strike action forced the Coalition to cut the value of Royal Mail on the eve of its sell-off.
Shares in Royal Mail were sold by the Government at £3.30 earlier this month, which valued the firm at £3.3bn. But since then shares have soared to over £5, suggesting the company is worth £5bn.
Bosses at the Communications Workers Union claimed that in any other walk of life, securing such a poor deal would be a sackable offence for the Business Secretary. CWU general secretary Billy Hayes said: “On the opening day of the flotation Vince Cable wrote off the undervaluation as froth. A week later, we were told it was the fault of the CWU.
“We now have a prima facie case of a conspiracy against the UK taxpayer who were opposed to the sale and have now been robbed of billions. In any other walk of life this would be a sacking offence and we call on Vince Cable to resign.”
The war of words comes as the Whitehall spending watchdog has announced it will carry out a value for money probe into the sale, to ensure the taxpayer was not ripped off.
The National Audit Office said: “The examination will cover the issues of how the price range for the initial public offering was set and the discussion of possible revisions to the range.”

£10bn price tag fuels Royal Mail row

1 Comment on "£10bn price tag fuels Royal Mail row"

2 Trackbacks & Pingbacks