£3.3bn Royal Mail flotation to kick off today

The UK government has announced that members of the public will be able to apply for shares in Royal Mail later today as it started the process of a flotation that will value the delivery service at up to £3.3bn.

Business Secretary Vince Cable said shares in the group are expected to begin trading on the London stock market on 11 October, with unconditional trading starting four days later.

The offer range for the shares has been set at 260p to 330p, which would give Royal Mail a market capitalisation of between £2.6 billion and £3.3bn.

Royal Mail staff will get a 10 per cent stake in the business for free, while the government will retain an interest of 30 to 43.9 per cent, depending on demand.

Cable said: “Today is an important day in the life of Royal Mail – people can now apply to buy shares in this iconic British brand.

“We have already committed to give eligible Royal Mail staff a real stake in the company by giving them 10 per cent of the company shares for free. Now the sale of government shares will give others a chance to have a real stake in this important company and we are encouraged by the shown by potential investors so far.”

Royal Mail chief executive Moya Greene said: “We will now be better able to compete in what is a fast changing and intensely competitive market.”