VINCE Cable is expected to announce the next stage in the government’s sale of Royal Mail this week, as the coalition pushes ahead with plans to float the postal service for up to £3bn.
The business secretary is set to confirm that the biggest privatisation since British Rail is ready to go and unveil a retail offering designed to encourage ordinary members of the public to buy shares in the 497-year-old business.
Royal Mail is expected to float in the autumn with a valuation that would place it at the lower end of the FTSE 100.
It is understood that Cable will not use his announcement, which could come as early as tomorrow, to announce the formal intention to float document or prospectus.
Instead he will be fulfilling a requirement in legislation to inform the Commons “as soon as reasonably practicable” when he has made a final decision on how to dispose of the shares.
The legislation, passed by the coalition in 2011, also requires Cable to state the method through which the shares will be sold and the timing of the sale.
He will also set out his preferred method of distributing 10 per cent of Royal Mail’s shares to existing staff.
News of Cable’s impending announcement came as members of the Communication Workers Union (CWU) toured the City on an open top bus to protest against the banks that are working on the IPO, including Bank of America Merrill Lynch, Goldman Sachs and UBS.
Despite the offer of an 8.6 per cent pay rise the CWU insists its members they will go on strike if the privatisation goes ahead, claiming any extra pay would be offset by a decline in working conditions.
The CWU will continue its protest against the City’s involvement in the deal tomorrow lunchtime outside the Gherkin. Banks working on the flagship IPO – who also include Barclays, Investec, Nomura and Royal Bank of Canada – will share a fee of just one per cent, well below the average.