The Government has raised £750 million from the sale of half of its remaining shares in Royal Mail to City investors – but ordinary taxpayers were unable to buy a stake.
All the shares were sold to institutional investors like pension funds, hedge funds and insurance companies within hours of the sale being opened by the Department of Business Skills and Innovation.
Labour reacted angrily to the news. Shadow business secretary Chuka Umunna said the sale was ‘disgraceful’.
"It's disgraceful the Government is rushing to dump its stake in Royal Mail to City speculators without giving ordinary investors a look in," Umunna said on Twitter.
"The Government does not seem to have learnt the lessons from their initial botched fire sale of the Royal Mail."
It's disgraceful the Government is rushing to dump its stake in Royal Mail to City speculators without giving ordinary investors a look in.— Chuka Umunna (@ChukaUmunna) June 10, 2015
BIS has said that the shares sold for 500p each - a modest discount to yesterday's closing price of 516.5p.
The sale, which is part of a raft of measures aimed at paying down national debt, appeared to have knocked the shares this morning, sending them more than 3% lower to 499.9p.
Bank of America Merrill Lynch, Goldman Sachs and J.P. Morgan ran the sale, while Rothschild advised Royal Mail.
The BIS has said it will not sell any more of its Royal Mail stake for 90 days. It is not clear whether future sales will be offered to retail investors, as they were during the firm's controversial 2013 stock market listing.
That process saw the shares first float at 330p before the price surged - at its peak reaching 600p - leading to accusations that the government had shortchanged the taxpayer.Reuse content