Row erupts over 'cheap' Royal Mail

The Government has been accused of selling Royal Mail “on the cheap” after a clamour for shares has triggered claims that the privatisation undervalues the company by as much as a £1bn.
Speaking to BBC Radio 4’s Today programme, shadow business secretary Chuka Umunna claimed that the sale is “short changing” taxpayers, with City investors and hedge funds being the biggest beneficiaries of the sell-off.
Royal Mail’s shares are priced at between £2.60p and £3.30p each but are expected to be valued far higher than that when trading starts next week.
Analysts at Panmure Gordon said the company was worth up to £4.5bn – far more than the current upper valuation of £3.3bn.
The close of the share offer on Tuesday will be followed by a three-day period of “conditional trading” when City institutions can buy and sell the shares between each other. The final price will be announced on Friday and shares in Royal Mail will be traded on the London Stock Exchange from Monday next week.
Labour MP Alan Johnson, a former business secretary, told The Daily Telegraph: “There is a vast difference between pricing Royal Mail shares conservatively and undervaluing them by £1 bn. This is ripping off the taxpayer on an epic scale.” Party sources suggested that Labour was looking at ways to use parliamentary procedures to delay the flotation and allow a rethink on the valuation.