Royal mail has agreed to a settlement to comply with the French competition authority (Autorité de la Concurrence) over allegations of breached antitrust laws by one of its subsidiaries, GSL France.
Earlier this year Royal Mail was given notice from French competition authorities concerning a possible breach of antitrust law, which occurred before the end of 2010. At the time of the notice the company commented: “We are currently considering the notice received from the French regulator,” it said. “Given the early stage of this matter, we cannot yet determine the amount or range of potential loss; however, it is possible that it could be material.”
According to French laws, the company can be imposed a maximum fine of up to £160 million. However, with this agreement Royal Mail will benefit from a reduced fine of any size.
Britains Royal Mail made an £18-million provision to be taken in its results for the first half of fiscal 2014-2015 year ended September 28th. The provision in divided in two sections – £6 million to cover legal and compliance costs and £12 million to cover the fine itself.
“The fine could end up being larger than our estimate,” a spokeswoman of the company admitted. The actual amount of the fine will not be determined before the second half of the fiscal 2015-2016 year.
Besides Royal Mails subsidiary GLS France, the French regulator is a also investigating a number of other companies such as La Poste, DHL/Deutsche Post, FedEx, TNT Express, and SNCF.
Today Royal Mail PLC started trading with an opening price of GBX403.10 per share in London and stood at GBX404.10 at 9:32 GMT, up 1.56%. High/low prices were respectively GBX407.0/GBX401.4. The company has a market capitalization of £3.98 billion. According to the Financial times, the 16 analysts offering 12-month price targets for have a median target of GBX457.50, with a high estimate of GBX700.00 and a low estimate of GBX360.00. The median estimate represents a 14.98% increase from the previous close of 397.90 pence.
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