Royal Mail Shares

2010

Vince Cable said on Wednesday there had been 700,000 individual retail applications for Royal Mail shares – which were seven times oversubscribed – and was confident they had been “priced in the right place”.
Asked about the likely premium when the shares start trading on Friday, the business secretary said people should look beyond the immediate “froth” that will arise.
“We are interested in getting a privatised institution over a period of years,” he told the Commons select committee examining the sale.
He added that broker Panmure Gordon’s view that Royal Mail was worth £4.5bn was “way outside the estimates of most of the equity analysts”.
The flotation is set to become one of the most sought-after state sell-offs since the privatisation of British Telecom and British Gas in the 1980s following huge investor demand that left the offer heavily subscribed at its close on Tuesday night.
Despite the threat of strikes by postal workers and criticism by Labour that taxpayers are being short-changed, the coalition is close to selling a majority stake in the near 500-year-old Royal Mail – the fourth attempt to privatise it in 20 years.
The coalition is selling up to 60 per cent of the company in the most ambitious privatisation since the railways in the 1990s.
The offer is likely to be priced at or close to the top of the 300p-330p range, valuing the state-owned postal operator at £3.3bn. Brokers expect the stock to open at a premium when conditional trading begins on Friday.
Institutional investors that placed orders for Royal Mail shares at less than 330p risked missing out amid strong demand, bankers for the sale warned.
They told the market that the initial public offering was significantly oversubscribed and many institutional investors that applied for stock at a lower price may not get any allotment.
The IPO closed to institutional investors at 5pm on Tuesday. Brokers said there had been “unprecedented” demand from private investors, who had until midnight to apply.
Whitehall officials declined to confirm reports that institutions had placed orders for more than £30bn of shares.
Such a figure had little meaning because institutions, realising demand was heavy, had ramped up orders in the hope of winning just a proportion of them, they said.

Michael Fallon, business minister, sought to reassure retail investors that they would get their “get their fair share”. That is likely to mean that when allocations are decided, no one who has applied for shares will receive less than the minimum application level of £750.
Mr Fallon’s remarks came amid fears that smaller buyers will be sidelined by City banks and hedge funds, which will get around 70 per cent of the shares being sold.
The grey market price offered by IG Index, a spread betting firm, fell back to 380p-400p after profit-taking, compared with 396p-416p on Monday.

Alastair McCaig, IG market analyst, said a premium was likely because institutions will not have been able to get all the stock they want, though it might be “a touch optimistic” to think the price will go above 400p.
The final price and allocations will be announced on Friday, after ministers have assessed demand. Full trading will start on October 15, when all retail investors will be able to sell.
The government has said it will sell between 40.1 per cent and 52.2 per cent, plus another 7.8 per cent if demand is high.
Only 368 Royal Mail’s 150,000 workers have declined the offer of free shares in the company. Ministers reserved 10 per cent of the shares for staff.
The low level of opt-outs means that 99.75 per cent of workers have decided to accept shares despite the industrial action ballot being conducted by the Communication Workers Union.

Glen_Clark

grey_gym_sock wrote: »

you also get to decide when it's the right time to do this.

:T Precisely

grey_gym_sock wrote: »

it's not decided for you my somebody who doesn't share your principles.

That would be like letting your opponent tell you how to play the system

scott_lithgows

2010 wrote: »

What are they striking for?

The RM being sold off

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well it has been.
The free shares

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well they took them.
The £300 lump sum if they don`t strike

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well keep working.
The 8% pay rise over three years

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most people will be lucky to get 1%.
Their now guaranteed public sector pensions

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talk about turkeys voting for Christmas.

Royal Mail wanting to take 50% out of the pension fund

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with their track record on pensions!

lewis92

Just checking my application now, says submitted for Dealing

alanq

2010 wrote: »

You forgot to mention that Black Wednesday happened in between so they were not normal circumstances.

It was Black Monday. Do you think that we are currently living in "normal circumstances"?

http://www.telegraph.co.uk/finance/personalfinance/investing/shares/10363828/Royal-Mail-beware-the-lessons-of-Black-Monday.html

sabretoothtigger

The Business Secretary told the MPs Government brokers had been deluged with 700,000 applications for Royal Mail shares and that the retail offer was “six or seven times” oversubscribed.

http://www.telegraph.co.uk/news/uknews/royal-mail/10367550/Royal-Mail-warns-of-job-losses-after-privatisation.html

tuk

...The mid-price in the grey market is 397p

..........

2010

tuk wrote: »

..........

Those who went through a broker can trade first thing Friday but not those who went through the RM site.
They have to wait until Tuesday 8am.

The basis of allocation and offer price are expected to be announced at 7am on Friday 11th October and conditional dealing on a 'when issued' basis will start at 8am.

If you have applied for shares we hope to have your allotted amount posted to your account prior to the Market opening on Friday, and you will be able to start dealing on a 'when issued' basis straight away.

Although most unlikely, should Royal Mail decide to cancel the listing during conditional dealing, all deals in Royal Mail shares will become void. Clients who sell their Royal Mail shares and reinvest into another investment will be liable for any difference if the deals become void. It is also not possible to buy shares within an ISA or SIPP during conditional trading, but you can sell them if you wish.

We expect that Admission will become effective and that unconditional dealings in the Ordinary shares will commence at 8am on Tuesday 15th October.

Based on the high demand for the Offer, we expect to be extremely busy when the allocations and Offer Price are announced. We do of course aim to keep disruption to a minimum and thank you in advance for your understanding.

deaglecat

of course it is possible that all the early sell orders will depress prices and that holding while the early orders are cleared May result in a better sell price ?

dell12

deaglecat wrote: »

of course it is possible that all the early sell orders will depress prices and that holding while the early orders are cleared May result in a better sell price ?

It might, but you have to remember the scale and buying power of the buyers and sellers.