The U.K. said it expects to hire banks to advise on an initial public offering for Royal Mail Group, the 363-year-old state postal company, by the end of May.
Business Minister Michael Fallon said a listing on the London Stock Exchange is the government’s preferred option, but it is also open to a private sale.
Royal Mail is also exploring the option of raising capital from the international debt markets, Fallon said.
The government said it intends to finalize a sale during the current financial year, which ends in April 2014.
An IPO, which is expected to value the group at between £2 billion and £3 billion ($3.1 billion to $4.6 billion), most likely will take place in the fall, according to market analysts.
At least 10 percent of the shares will be reserved for Royal Mail’s 150,000 workers, who stand to pocket up to $2,300 each.
The Communication Workers Union, which represents 120,000 of the work force, opposes the privatization, claiming it will lead to job losses, inferior work contracts and the breakup of the company.
The previous Labour government pulled a planned sale of 30 percent of Royal Mail in 2009 following a rebellion by its own lawmakers and a threat by the union to end financial aid to the Labour party.
Fallon said it is time for the government to “step back” from Royal Mail and allow its management “the real commercial freedom that it has needed for a long time.”
Several European countries have privatized their state mail companies, including Germany and Netherlands, which led to the creation of global logistics firms Deutsche Post DHL and TNT Express.
Royal Mail posted an operating profit of £144 million ($223 million) in the first half of 2012, up from £12 million ($18.6 million) in the year-earlier period, the result of shifting the company from the declining letter business to the growing parcels market.