The Royal Mail IPO - After the dust has settled
Following on from a period of political wrangling, protestations, arguments and counter-claims, the Royal Mail finally went public on 15 October 2013 (after a conditional sale four days previously). Depending on political belief, it was a step too far that even Margaret Thatcher wasn't prepared to take, or a necessary outcome in order to help balance the books and make for a more efficient service.
Either way, all those arguments came to an end when trading opened that morning and the Queen's head, as Thatcher had called it, was put up for sale.
Tensions still ran high in the immediate aftermath of the sale, but now, with the dust settled, it will be easier to see just what implications the sale has had on one of Britain's most famous creations.
The right price?
One of the biggest issues which came out of the sale involved the price at which shares were set. After initially setting out a value range which they would fall between (260p to 330p), huge demand prompted a decision to make them the full £3.30. Before the end of the day, however, shares were changing hands for 508.3p, dropping back to 502.5p at the close of trading. In the days that followed it rose further still, reaching 568.5p. Not only that, forecasters have claimed these increases aren't set to slow down just yet.
The real cause for consternation was the fact that, prior to the sale, two banks had separately valued the Royal Mail at £5 billion. Had this been adhered to, shares would have started at £5 each and more money could potentially have been raised from the sale.
As a result MPs called representatives from investment bank Lazard - which acted as an independent adviser for the sale - in for questioning on the eventual sale price. For its services, Lazard was paid £1.5 million. The investigation is ongoing.
Whatever the arguments from those who didn't want the Royal Mail to be sold, the decision was vindicated the moment they went on sale, with demand for shares at a stratospheric level.
In fact, the Royal Mail IPO generated the most interest seen on the British stock market since lastminute.com announced it would be going public some 13 years ago. Ahead of the IPO, some 700,000 applications had been lodged with the UK government from investors looking to buy shares.
In the aftermath of the sale, proposed strikes put forward by the Communication Workers Union (CWU) were also revoked, although this was put down to ongoing talks between the union and Royal Mail management.
Now the dust has settled on the Royal Mail IPO, it's much easier to determine whether it was a success or failure. Much of the political wrangling, however, is still ongoing, with many people calling for answers from those in the know. As such, it seems as though the sale was indeed a success - albeit one marred by small failures. The full outlook, though, is still to come.