London -- A British private investor group, CVC Capital Partners, offered $3.3 billion for a 30 percent stake in Royal Mail, the UK's state-owned postal company.
The bid is higher than a rival offer from TNT, the Dutch mail and logistics group, but falls short of the UK government's original $5 billion target, according to press reports.
CVC and TNT are the only two contenders for a Royal Mail stake after Deutsche Post, the German mail, express delivery and logistics company, pulled out of the bidding.
Legislation to partially privatize Royal Mail will be debated next week in Parliament where it is expected to face fierce opposition from lawmakers in the ruling Labour government.
More than 150 Labour members of Parliament have signed a motion opposing the proposed deal which means the government will require the support of the opposition Conservatives to push through the bill.
The sale is also bitterly opposed by labor unions, but the government insists Royal Mail needs an injection of capital to ensure its long term survival.
CVC has emerged as the preferred bidder as it has pledged to invest a substantial sum in modernizing Royal Mail's technology and infrastructure.
TNT's bid is said to be focused on securing control of Royal Mail’s profitable parcels business, General Logistics Services.
The head of Royal Mail Adam Crozier has accused TNT Express of trying to poach GLS's customers ahead of the privatization.
The government has said it will take over Royal Mail's pension deficit, estimated at around $15 billion, as part of its partial privatization.
Contact Bruce Barnard at email@example.com.