STOCKBROKERS will today be invited to take part in the privatisation of Royal Mail, as part of a push to ensure ordinary members of the public can buy shares in the forthcoming IPO.
City A.M. has learned that business minister Michael Fallon will this morning send details of the offering to traditional brokers and online share dealing services in the hope of maximising demand among retail investors.
“This is about building momentum, step-by-step, to whet investor appetite,” Fallon said yesterday. “I want there to be a big retail element to this, either through intermediaries or through us.”
Royal Mail is being lined up for a £3bn float this autumn, with 10 per cent of the shares automatically handed to employees for free. But unions, who have rejected the sweetener of an 8.2 per cent pay rise, are urging their members to refuse stock.
“We’ll see how many posties opt-out,” Fallon said. “The unions in the mid-80s advised their members not to buy the shares but they still bought them in droves – and that’s when they had to pay for them.”
Fallon said he is willing to offer further protections on the Royal Mail pension fund but rejected the idea of a union-backed trust holding shares on behalf of workers.
“This is about 130,000 people, not about one union general secretary. So I want to spread power – I don’t want one block, whether it’s a pension fund or a union, controlling this company. I want postmen and women to hold the shares themselves, to receive the dividends themselves and to vote themselves.”