Tuesday 8 October saw the deadline for the public to apply for shares in Royal Mail, but the high demand means that members of the public are unlikely to get all the shares they applied for. Concerns have also been raised that the service has been undervalued, an opinion reinforced by the huge over-subscription to purchase the shares.
Labour’s shadow business secretary Chuka Umunna says the taxpayers are being “short-changed” as the service is being sold off too cheaply. The Royal Mail was valued at £3.3bn, and shares were being sold at 330p. Umunna’s claims come as the closing price of shares on Friday, the first day of conditional trading, are expected to reach 403p-409p. This will give investors a profit of 25%. Vince Cable hit back at Umunna, accusing him of being “irresponsible” in talking up the value of the shares. He said “It is irresponsible to imply that a share offering looks significantly undervalued. I think you should consider the risk that you may be influencing the decisions of retail investors.”
Of the approximate 150,000 Royal Mail staff, only 368 chose not to accept free shares in the privatised company. The offer of free shares was to try and appease the workers and persuade them not to strike over the privatised company. The offer of free shares was to try and appease the workers and persuade them not to strike over the privatisation of the company. Members of the Communication Workers Union (CWU) have until 16 October to vote to strike or not, and if approved strike action could being as early as 23 October.