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Royal Mail selloff announced

In a blatant attempt to curry favour with Royal Mail employees the UK government yesterday announced plans for a massive share sale which would see 10% of shares available put to one side for Royal Mail employees. It is believed that Royal Mail staff will be offered a discount on the issue price as well as the potential to have a very prominent say in the future direction of the company.

This will be the largest UK privatisation for 25 years and is likely to attract criticism and positive interest in equal measures. As a side-note the UK government also revealed that the £10 billion Royal Mail pension fund deficit will be taken on by the UK taxpayer and not sold off as part of the proposed floatation. In effect Royal Mail will be stripped of its major liabilities allowing large scale investment in new technology and new working practices for the future.

There will be obvious concerns regarding future ownership of Royal Mail which if floated on the stock market would be open to potential takeover approaches from overseas counterparts. This is not something which the UK government would encourage but ultimately in a free market there is very little that can be done.

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