STERS could be forced to consider a “Plan B” sale of Royal Mail if unions continue to stand in the way of a stock market float, business minister Michael Fallon has warned.
The state-owned entity is hoping to appoint global advisers within the next fortnight for an initial public offering (IPO) but a flurry of interest from private buyers and deadlock with unions over a share offering could increase the chances of a private sale, the minister said.
“Our preference is for an IPO, but if that’s not possible we would look at alternatives (such) as sovereign wealth funds or other institutional investors,” Fallon told The Observer newspaper yesterday.
Fallon is proposing to give 10 per cent of shares in a IPO to Royal Mail staff – which could be worth as much as £1,500 – but the Communication Workers Union’s opposes any privatisation of the business, saying it is not the interest of the workers.
Royal Mail is understood to have previously sounded out private equity heavyweights like CVC Capital Partners, KKR and the Carlyle Group to gauge their interest if a flotation plan is shelved.