Royal Mail shares open 36 percent higher on market debut

The hugely oversubscribed sale of a majority stake was priced at 330 pence per share on Thursday.

Royal Mail shares open 36 percent higher on market debut

World Bulletin / News Desk

Shares in Britain's Royal Mail postal service opened at 450 pence in their London stock market debut on Friday, 36 percent above their privatisation price.

The rise will fuel the debate over whether the sale, one of Britain's biggest privatisations for decades, was priced too cheaply, following criticism from the opposition Labour party that the government was short-changing taxpayers.

The hugely oversubscribed sale of a majority stake was priced at 330 pence per share on Thursday, the top of its expected range and valuing the near 500-year-old company at 3.3 billion pounds ($5.3 billion).

Trade union members, who opposed the sale and are balloting for strike action, were due to hold a protest outside the London Stock Exchange on Friday.

"There's no celebrations in delivery offices around the country today," Communication Workers UnionGeneral Secretary Billy Hayes told BBC Radio.

"The real test of whether the staff are happy with this privatisation will be next Wednesday when we expect to declare a yes vote for strike action."

Royal Mail's public offering leaves the government with a 38 percent stake, but this could fall to 30 percent should it choose to exercise an over-allotment option, whereby extra stock can be sold if there is strong demand.

The shares are trading conditionally until Oct. 15, meaning in theory if the sale was cancelled the trades would be void.

By 0714 GMT the shares were trading at 449 pence, having hit a high of 456 pence.

Last Mod: 11 Ekim 2013, 10:25
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