‘Underpriced’ Royal Mail sale to be probed by MPs
A panel of MPs is keen to investigate the privatisation of Royal Mail by calling in City bankers who advised ministers on the sell-off, reports Mark Kleinman, City editor at Sky News.
Sky News has learnt that certain members of the Business, Innovation and Skills (BIS) Select Committee want to interview executives from the syndicate of banks responsible for the 330p pricing the initial public offering (IPO).
Royal Mail's shares closed up four per cent on Monday, with shares at 475p, after a 38 per cent leap on Friday. This put its value at £4.75bn – nearly £1.5bn more than the amount at which the government chose to privatise it.
Adrian Bailey, the Labour MP who chairs the BIS committee said, "It seems that the government has given its advisers a lot of money for depriving the taxpayer of £750m of value," adding "I don't think we can let the matter rest". Another committee member emphasised the importance of interviewing the bankers involved to establish the precise methodology used to value the company.
As Morning Wire editor Allister Heath points out, the government couldn't have known the right price in the absence of a market – Watch Allister Heath here.