Government hires banks for Royal Mail privatisation

Suzie Neuwirth

THE UK Government today confirmed that UBS and Goldman Sachs have been appointed as joint global coordinators and bookrunners for the planned privatisation of Royal Mail, which is expected to result in an IPO this year.

Barclays and Bank of America Merrill Lynch have smaller roles on the deal, following a competitive tender process for the mandates “that were contested by a large number of leading banks”, business minister Michael Fallon said in a statement.

The appointed banks will work with the government and Royal Mail to structure a sale, most likely through the government’s preferred option of a stock market float.

The appointment of banks to junior syndicate positions for an IPO will be announced in the next few months.

City sources have been reported as saying that banks would receive massively reduced fees in exchange for landing the coveted mandate.

“While all options for the form of sale remain open, it is important that we are in a position to move ahead swiftly with our chosen route once we take the final decision,” said Fallon.

“Given the lead time and preparatory work involved in readying an IPO, the appointed banking syndicate will work to make sure we are ready to proceed when the time comes and will be able to deliver strong, high quality investor demand to ensure a successful IPO for the taxpayer and for Royal Mail.”

Lazard has been advising the government throughout the process.