Royal Mail share price: Pay talks with CWU extended to November 27

on Nov 22, 2013
Updated: Oct 21, 2019
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iNVEZZ.com, Friday, November 22: Negotiations between Royal Mail (LON:RMG) and the Communication Workers Union (CWU) on pay and working conditions have been extended for another week to November 27.

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The CWU, which represents staff at Britain’s newly privatised postal service, said in a statement on its website that progress had been made to finalise an agreement that would include an improved pay and reward offer, a separate pension agreement for employees and better working conditions. It added that “…both sides have agreed to an extension of the ballot deadline to allow for talks to continue. This is the final extension and is agreed for a further seven days.” Royal Mail staff called off a planned strike last month after the company and CWU committed to reaching an agreement (Royal Mail share price climbs as CWU calls off strike).

With the deadline for talks extended, CWU postal executives will meet on November 25 “to consider the detailed position and determine whether industrial action should be announced.”
Royal Mail’s share price yesterday closed 0.05 percent lower at 544.73p, valuing the company at £5.45 billion – 65 percent above the valuation of £3.3 billion in the initial public offering last month. The banks hired by the government to help sell one of Britain’s most valuable and historic assets have come under parliamentary scrutiny for undervaluing Royal Mail (Royal Mail share price: Advising banks in gun over float valuation).

Adrian Bailey, who chairs the Business, Innovation and Skills (Bis) select committee that grilled bankers over the valuation of Royal Mail on Wednesday, said that the government would be “mad” to pay more than £4 million in deferred fees to the banks that advised on the sell-off because they undervalued the company. The Guardian quoted Bailey as saying that paying the fees in addition to more than £12 million already handed over would reward highly paid bankers who set the float price too low at the expense of the taxpayer.

IPO bookrunners Goldman Sachs and UBS priced the company at 330p a share, raising the taxpayer £1.7 billion from the sale of 60 percent of Royal Mail last month. But Royal Mail’s share price jumped 38 percent on the first day of trading and has remained high ever since. Bankers have denied undervaluing the company and insisted that 330p was the clearing price for 600 million shares.

Goldman Sachs brokered deals on 21.5 million Royal Mail shares worth around £123 million by 31 October, the Independent reported yesterday, citing figures from the official share register. The bank insists it bought the shares on behalf of clients and says it hasn’t acquired any for itself. UBS, which bought 375,000 shares, also claims to be holding the stock on behalf of third parties. Other substantial Royal Mail shareholders listed by Equiniti, the firm handling Royal Mail shares purchased via the government’s website, include banks ABN Amro and JP Morgan.
The Bow Group think-tank whose president is Sir John Major, the former prime minister, yesterday called for an inquiry into the flotation which had “catastrophically undervalued” the company. It also claimed that the privatisation was a “short-sighted firesale”, which has deprived taxpayers of a “valuable national asset”.
**As of 10:15 UTC buy Royal Mail shares at 545.00p.**
**As of 10:16 UTC sell Royal Mail shares at 544.50p.**
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