Home » Uncategorized » We should rejoice that the Royal Mail IPO was a success

We should rejoice that the Royal Mail IPO was a success

Royal Mail“Did you buy any Royal Mail shares?” “Have you sold them yet?” Two of the most common “icebreaker” questions I have heard in the last fortnight or so.

The biggest privatisation for some time was always going to be controversial. The Communication Workers Union has consistently opposed it.

Politicians, seemingly agreed on enabling the centuries-old business to access the capital markets, have been at daggers drawn over the £3.3 billion price-tag since well before the first day of trading on the London Stock Exchange. And the full implications of both the stake built by The Children’s Investment Fund and the mooted pay and pensions deal with the CWU will not become clear for some time.

Whilst we will need to monitor the Business Select Committee and National Audit Office scrutiny of the flotation process, based on what I know at the moment I would expect the Government’s line, that it followed its bankers’ advice on valuation, to carry the day. There’s nothing wrong with pricing a share offer to sell. And, let’s face it, it would have been pretty disastrous if the Royal Mail IPO had failed.

That would have been bad for the Royal Mail and its employees and, by extension, bad for other businesses using or planning to use our stock markets. It would have threatened an economic recovery only just starting to get off the ground and deprived many, many people, whether they invested directly, or indirectly through a pension fund or insurance product, of a boost at a time when good returns are still hard to come by. And whatever you think of the £3.3 billion IPO valuation, the Government’s 38% stake has risen in line with those of other shareholders – no wonder another offer to the public by the Government before the next election is rumoured to be very much on the cards. 

By Jonathan Deverill


1 Comment

  1. […] increase in value of Stock Market investments (read more), is acting as a spur to confidence. The next significant step will be larger companies having the […]

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

About SME Rocket

If you are a fast growing SME, no matter your sector, with an average annual turnover of £2.5-£100 million then this blog will give you insight into business critical issues. Your company is one of a number of unsung heroes in the UK economy and you are very important to the UK.

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 885 other followers

Categories

Blog archive

Follow DMH Stallard on Twitter

Follow

Get every new post delivered to your Inbox.

Join 885 other followers

%d bloggers like this: