The UK government has sold off a 13 per cent stake in Royal Mail. The remaining one per cent it owned was gifted to postal service employees.
The sale, which occurred overnight raised £591.1 million for the government, bringing total proceeds from the sell-off to £3.3 billion. It also means that the 500-year-old postal service is now fully in private hands for the first time in its history.
Shares were sold for 455 pence each in a process known as an "accelerated book build" – meaning they were available only to institutional investors; retail investors were unable to buy stock.
Royal Mail has around 143,000 employees, meaning they'll gain around 70 shares each at a value of approximately £318. They'll have to wait three years before they can cash them in. This also means that employees now own around 12 per cent of Royal Mail.
Commenting on the sale, business secretary Sajid Javid said: "This is a truly historic day for Royal Mail with the workers gaining a share of this history."
He explained that selling the final stake was in the best interests of the company, its customers and Britain's taxpayers.
"We have delivered on our promise to sell the government's entire remaining stake which means that for the very first time the company is now wholly owned by its employees and private investors. This is the right step for the Royal Mail, its customers and the taxpayer," he said.
Mr Javid added that proceeds from the sale will be used to help pay off the national debt. This is "a crucial part of our long-term plan to provide economic security for working people," he said.
The sale of Royal Mail is part of Chancellor George Osborne's debt reduction plan. In June, he sold off a 15 per cent holding in the company at 500 pence. This raised £750 million. Last month, a one per cent shareholding was transferred to the Royal Mail Share Incentive Plan.
Mr Osborne called the sale a "milestone moment in the long and proud history of the Royal Mail," adding it would help to secure the company's long-term future.
"By fully leaving state ownership, we have a win all round – for customers, the workforce and the taxpayer," he said.
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