Bankers to argue Royal Mail float was transparent

 
David Hellier
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BANKERS summoned to give evidence to the Business Select Committee tomorrow are expected to argue they would have risked the flotation of the Royal Mail collapsing if they had tried to re-price it upwards at the last minute.

They will also argue, according to friends, that far from being an opaque process as the chairman of the committee has already claimed, it was fully transparent.

The government was kept in the picture the whole way through the so-called book-building exercise, say friends, when advisers to a new issue determine the levels of support for a share issue.

“They knew exactly what the institutions were saying and what price would put certain funds off,” said one person close to the key bankers at UBS and Goldman Sachs, James Robertson and Richard Cormack. “And they relayed all this to government.”

Those sympathetic to the pair say recent price falls for newly-listed companies, including Partnership, Just Retirement and Tinkoff, demonstrate the perils in pricing too aggressively.