700,000 PRIVATE INVESTORS APPLY FOR ROYAL MAIL SHARES – The planned privatisation of Royal Mail had been met with public controversy; according to the unions.
Despite Union claims that Royal Mail should remain under state control and that privatisation will only benefit a few fat-cats, the application for private investor shares has been oversubscribe by seven times the number of share being made publicly available.
The Government did point out earlier in its plans that it would not launch the privatisation of Royal Mail amidst of a fanfare of media advertising. The Government insisted that the money saved from advertising would allow more of the funds raised to go into the Treasury in order to help pay for vital services in the United Kingdom.
The move appears a sensible one for with just standard media coverage through the national newspapers and online media sites the shares have been massively oversubscribed.
According to reports some 700,000 private investors have now applied for share but this demand outstrips supply by over seven times.
Business Secretary Vince Cable has announced that this is only a rough estimate and that the figure is likely to grow exponentially as we move close to the date of closing applications.
As yet it is not clear how the shares of Royal Mail will be divided among Royal Mail employees, hedge funds and private investors; however it does appear that some potential investors are going to walk away empty handed due to the high levels of demand.
The deadline for the application for Royal Mail share is mid-night Tuesday and it is expected that the number of private investors clamouring for shares could reach 750,000.
There are views that it should be the small private investor that takes precedence over the large hedge funds as it is the public who will remain as the backbone of Royal Mail’s success.
It is clear that the public and large investors have confidence in Royal Mail and it has been a number of years since we last witnessed a company floatation that has cause such excitement, however it is clear that some investors, both large and small, are going to be sorely disappointed when the final allocation of shares is announced.
According to Barclays Stockbrokers the vast majority of the investors they are dealing with have applied for shares far exceeding the minimum investment requirement of £750; such is the confidence in the floatation of Royal Mail.
More on this story … Daily Mail