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Posts Tagged ‘Vince Cable’

It’s one law for the banks, another for the rest of us

October 23, 2013 6 comments

Locust

Vince Cable’s efforts to keep the Royal Mail in the hands of “blue chip investors” and away from “spivs and speculators” was delivered a blow this week when it emerged that the Children’s Investment Fund has taken a 5.8 per cent stake in the company following its privatisation earlier in the month.

The fund was founded by Chris Hohn, described as a “locust” by German politicians, and damned by the former CEO of Deutsche Börse, Werner Seifert, for his part in scuppering a previous business deal.

The London-based hedge fund has bought 58.2m shares or 5.8pc of Royal Mail. Under stock exchange rules, TCI had to declare its stake when it reached 5pc of the company. The threshold was reached on Friday.

Mr Cable has often criticised hedge funds for being short term investors and has repeatedly insisted that Royal Mail would be sold only to “long-term, blue chip” institutional investors.

Meanwhile Chancellor of the Exchequer George Osborne has responded to criticism that the government had sold off the Royal Mail too cheaply.

At a Thomson Reuters Newsmaker event on Tuesday, he told his audience that initial public offers are routinely offered at a discount and the government had followed advice from its bankers on details of the sale.

“On all fronts it has been a great success,” he said.

Bargain basement

Lord Sugar lambasts Government for bargain basement sell-off: ‘You’re fired!’

And in the House of Lords, Labour peer Lord Sugar, star of TVs The Apprentice, questioned the expertise of the banks which had been advising the government on the sale.

He demanded: “Why did these so called experts sell the stock at such low levels and get it totally wrong to such an extent that the stock rose by 33 per cent the day afterwards and since then 54% on the issue price?

“Bearing in mind other reputable banks had come on record giving a valuation of £5 billion, why were these banks ignored and what will you be doing by way of an inquiry in finding out who the lucky institutions were that underwrote this bargain basement sale?”

Government spokesman Lord Popat said the key objective had been to “secure value for money for the taxpayer”.

Pressed by Labour’s Lord Donoughue on the level of fees paid to the banks, Lord Popat said: “The underwriting banks will share a maximum fee of 1.2 per cent of the IPO receipts or £16.9 million. This maximum includes a potential discretionary fee of £4.2 million. The actual fee will be finalised shortly. Lazards will receive £1.5 million as the Government’s independent adviser.”

For those of you without a calculator, it means that three banks, UBS, Lazards and Goldman Sachs, share £18.4 million between them.

Markets

Of course, the usual reasoning behind the sale of the company, is that it would allow the Royal Mail access to the financial markets; but, you have to ask, what would have stopped the Royal Mail accessing the markets as a publicly owned company? The answer, it seems, is “very little.”

According to a letter in the Guardian prior to the Royal Mail’s flotation it “is purely the Treasury’s insistence on keeping to the UK’s unique borrowing rules, which are not followed by any other country.” The government-owned French energy company EDF, and the German transport company Arriva, have no such limitations, and operate freely in the UK. The Royal Mail was already classified by the Office of National Statistics as a public corporation and could have enjoyed the same freedoms as state-owned companies elsewhere in Europe. All that was needed was for the Treasury to adopt the same rules as other countries have had for decades.

The writer, John Perry, adds: “It continually surprises me that opponents of Royal Mail privatisation have not pursued this argument, especially as it addresses one of the government’s main arguments in favour of selling it off. Given that the government have already made a similar rule change in favour of the publicly rescued banks, there is a clear precedent for such a change in favour of Royal Mail.” This would  have rendered privatisation unnecessary, he says.

In other words, it’s one law for the banks, and another for the Royal Mail.

Royal Mail Shares: Vince Cable Defends Goldman Sachs and UBS-Backed Offer Price

October 20, 2013 Leave a comment

So guess who was behind the undervaluation of the Royal Mail? That’s right: it was Goldman Sachs, the “great vampire squid wrapped around the face of humanity”, as described by Matt Taibbi in Rolling Stone in 2009. According to Taibbi, not only was Goldman Sachs behind the financial collapse of 2008, but it has been heavily involved in every collapse since the Great Depression, engineering them in order to extract profits. It was Goldman Sachs who valued the Royal Mail at £3.30 a share, despite earlier valuations putting it much higher, at £5.00 a share, the current price. I wonder how many shares Goldman Sachs’ employees bought in advance of the sale in order to cash in on their gross underestimation of the price? Vince Cable talked disparagingly of “spivs and gamblers” in 2010, and yet here he is doing a deal with them, listening to their faulty advice.

http://www.ibtimes.co.uk/articles/515029/20131018/royal-mail-shares-price-vince-cable-goldman.htm

Privatisation is the last thing Royal Mail needs

January 13, 2011 1 comment

Vince Cable announced his plans for the privatisation of Royal Mail in October. Photograph: Lewis Whyld/PA

Vince Cable needs to look beyond the headline figures and develop a long-term solution to Royal Mail’s problems

From Comment is free.

Read more here.

No united front at the Royal Mail

October 27, 2010 1 comment

Memories of last year's postal workers' strike, which some managers broke, have not faded. Photograph: Jeff J Mitchell/Getty Images

The thought of striking managers caused hilarity in the posties’ smoking shed this morning. The thought of privatisation didn’t.

From the Guardian, Comment is free.

Read more here.

The Unsorting Office

October 14, 2010 Leave a comment

The end of bikes?

It’s been a bad few weeks at our delivery office. First of all Vince Cable announced that the Royal Mail was going to be privatised. Then, at one of our weekly ‘Work Time Listening and Learning’ meetings, the line manager announced that our delivery office is going to close.

From the LRB blog.

Read more here.

The mood in the Royal Mail sorting office

September 16, 2010 3 comments

Vince Cable has spoken: Royal Mail is to be privatised. My colleagues wonder whether things can possibly get any worse…

From the Guardian.

Read the rest of the article here.

Royal Mail part-privatisation is a lose-lose situation

May 25, 2010 Leave a comment

Vince Cable’s proposal will mean a loss of public control, a loss of profits and a new tier of costly management…

From the Guardian.

Read more here.

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