Royal Mail to hold Initial Public Offering in coming weeks

Royal Mail Group Ltd., the U.K.’s more than 350-year-old postal service, intends to hold an initial public offering of a majority stake in coming weeks to help the company gain a competitive edge against European rivals.

“This is an important day for the Royal Mail, its employees and its customers,” Vince Cable, who is the U.K.s business secretary said. “HM Government is taking action to secure a healthy future for the company. These measures will help ensure the long-term sustainability of the six days a week, one-price-goes-anywhere universal postal service.”

The sell of the postal service is the most disputable privatization since British Rail two decades ago, and is forcefully opposed by the unions, who are meeting with the Royal Mail chief executive, Moya Greene, today to once again voice their anger at the “great British flog-off”.

The government announced plans for the sale without offering an estimated value for the company. While the size of the stake will depend on market conditions, Business Minister Michael Fallon said the aim is to dispose of a majority. “I don’t see that a strike is necessary,” Fallon told BBC Radio 4. “There is a very generous payoff on the table. This is the right time to allow Royal Mail to access the capital markets, to invest in its future.” he added.

The Communication Workers Union plans to oppose the sale process by holding a strike on 20 September, which could lead to a nationwide strike by 10 October. It would be the first nationwide postal strike since 2009. The union is also pushing for a better pay deal, after rejecting a 8.6% pay rise over three years.

The union opposes the potential 3 billion pound flotation despite the government promising 150,000 postal staff a 10% stake in the company, worth up to 2,000 pounds each, for free. The government also promised staff a further 13.3 million pounds in dividend payments in the first year and promised a “progressive dividend policy” in subsequent years.

Goldman Sachs and UBS are lead advisers on the sale of shares.