Royal Mail shares 'valued at £8.6bn' ahead of £3.3bn sale, banks tell ministers
Tuesday 25 February 2014
Banks estimated the value of Royal Mail at up to £8.6 billion when approached months ahead of the eventual sale for £3.3 billion.
Business Minister Michael Fallon revealed the higher and lower estimates of 21 different banks, on an anonymous basis, in answers to written Parliamentary questions.
One bank estimated the value could be as low as £2.8 billion.
Mr Fallon cautioned the figures had only ever been estimates based on information in the public domain.
He said: "As the banks who appeared at the select committee on business, innovation and skills on November 20, 2013, stressed in their evidence, their valuations were primarily desk top valuations based on limited publicly available information and widely varying assumptions.
"These were, therefore, very much illustrative valuations which the banks produced several months before the IPO (initial public offering) was implemented against a completely different backdrop.
"They therefore did not accurately reflect the specific circumstances and market that prevailed immediately prior to the IPO when pricing decisions were being taken."
On average, the banks estimated a lower value of £3.9 billion and an upper value of £4.8 billion.
In his answers, to Labour MP Jim Cunningham (Coventry South), Mr Fallon said consultants Lazard were paid a fee of £1.5 million for advising on the IPO.
Ministers have faced repeated claims they under valued Royal Mail when they sold off 60% of the company last year only to see the share price soar.
Royal Mail shares opened today at 604.5p. They were initially sold at 330p.
Children's bookseller wins The Independent's new author search
Board creates magnetic field to achieve lift
- 1 Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
- 2 Banksy arrest hoax: Internet duped by fake online report claiming artist's identity has been revealed
- 3 Former East 17 frontman Brian Harvey turns up at Downing Street and 'demands to speak to Prime Minister'
- 4 Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
- 5 Paralysed man Darek Fidyka walks again after treatment by British doctors on brink of 'cure'
Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
Oscar de la Renta dead: Legendary US fashion designer dies after long cancer battle aged 82
Oscar Pistorius: The brutal prison life that awaits disgraced athlete
Banksy arrest hoax: Internet duped by fake online report claiming artist's identity has been revealed
Super-sized ships arrive in Britain: How big can they get?
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver 'kicks gay couple off for kissing'
Jose Manuel Barroso warns David Cameron against making 'historic mistake' over immigration reforms
Worst Airports of 2014: Poll names Islamabad airport in Pakistan worst in the world
iJobs Money & Business
£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...
£27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...
£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...
£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...