The initial public offering of Royal Mail was seven times oversubscribed with more than 700,000 investors applying for shares in the U.K.’s 497-year-old, state-owned postal company.
The shares will be sold at 330 pence (about US$5.20), at the top of the government’s price range, valuing the firm at £3.3 billion (about US$5.3 billion).
The government is selling 52.2 percent of Royal Mail in the biggest privatization since the state railway was sold in the 1990s, with a further 7.8 percent likely to be offered in the coming weeks depending on demand. Thirty percent of the shares are being offered to private investors and the rest are being offered to institutional investors, including foreign sovereign funds. There are reports that the institutional portion of the share offer is up to 15 times oversubscribed.
A 10 percent stake is being reserved for the company’s 150,000 employees, of whom all but 371 declined to take up the offer of free shares.
The shares will start trading tomorrow.