Royal Mail warns of job losses after privatisation

Royal Mail warns of job losses after privatisation

He insisted that Royal Mail was not being sold “on the cheap” and rejected the idea of imposing a windfall tax on the company if the valuations proved to be wrong. He repeated that the company had been valued by bankers and independent property experts.

Last week Panmure Gordon said Royal Mail was being undervalued by £1bn. Mr Cable said he “didn’t want to rubbish” the broker but said it was “an “outlier” and its views were “way outside the consensus”.

However an MP put it to him that one of the property valuers, BNP Paribas, had had a “long term” connection with Royal Mail and could not be considered independent. Mr Cable said he would look into the matter.

On the subject of risk, Mr Cable warned that the Royal Mail was “not a widows and orphans fund” but contained risks like other shares. He said was “rather unwise” for brokers to describe Royal Mail as “just a cheap stock”.

He said the “target market” was institutional investors, not hedge funds. “The aim is to place the shares with long-term investors,” he said.

Mr Cable said the Government would use its substantial minority shareholding to keep tabs on Royal Mail, particularly with regards to pay. He said he “wouldn’t expect [pay] to go up as a consequence of privatisaton.”

With regards to Moya Greene, the chief executive who was paid £1.6m last year, he said would “expect her and others to exercise proper restraint.”

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