Royal Mail share sale to go ahead
Despite serious concerns from the UK public, unions and a growing number of Labour backbenchers Lord Mandelson has revealed that the government is still going ahead with the sale of a 30% stake in the Royal Mail. It was thought that the deal was dead after a number of discussions came to nothing but apparently the UK government is still looking to bring in a significant partner in exchange for a 30% share of the business.
Despite signs that the UK public are strongly against the part sale of Royal Mail the UK government is in desperate need of funding due to the economic downturn. There are rumours of a bid from CVC, the venture capital group, but the £2 billion offer which is rumoured to have been put forward is well short of the UK government internal valuation. However, the opportunity to bring in a new partner who has promised to invest in new technology does hold its attraction for the government and is being considered at this time.
There are concerns that the UK government is spinning off the more profitable areas of Royal Mail and leaving the UK taxpayer to cover the remaining businesses and also the significant pension fund deficit. There are serious concerns that the UK government is in too much of a rush to sell off "the family silver" and this may be a subject which is brought up at the next general election.
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