10:57 10 October 2013
The government is ready to sell 52.2per cent of Royal Mail and it has been reported that each share will be sold at 330p; a price that is at the top end of what was the government was hoping for.
According to BBC business editor Robert Person, this is due to the huge demand that outstripped the number of shares on offer. This has been confirmed by Business Secretary Vince Cable who said that share-offering was seven times over-subscribed.
Tuesday will mark the full trading where the shares are expected to trade between 300p and 330p.
Initially, shares were priced between 260p and 330p. However, on Friday, the government decided to revise the figures following a very strong demand.
30per cent of the shares were offered to private investors and the rest will be sold to institutional investors such as pension funds and insurance companies.
The Royal Mail said the fundraising would provide it with money needed to modernise and compete in a competitive parcels market.
Under the terms of the share sale, Royal Mail employees will get a 10per cent stake in the business.
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