Goldman Sachs faces more questions over valuation of Royal Mail


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The Independent Online

Goldman Sachs bankers on the Royal Mail privatisation will again be hauled in front of MPs after their colleagues valued the postal service at nearly twice the price at which it was floated.

On Wednesday, the powerful Business Select Committee thought it had wrapped up its interrogation of ministers and their advisers ahead of a report into whether Royal Mail shares were underpriced when they were first sold last month.

Most of the committee’s MPs believe that the privatisation’s initial share price of 330p cost the taxpayer hundreds of millions of pounds, as their value shot up straightaway and have consistently traded at more than 540p.

However, it is understood that committee chairman Adrian Bailey is close to calling back the banks involved, particularly Goldman Sachs. He wants to challenge why the bank’s own analysts  said on Thursday that Royal Mail shares are probably worth 610p.

Earlier this month, Goldman and other banks on the flotation said the privatisation had been an “excellent transaction”, while business minister Michael Fallon said it was good value for the taxpayer.

A committee source said there was “a good chance” that Goldman would be called back to face the committee.