Royal Mail IPO given boost by Belgian float

Private equity firm CVC raised €812 million (£693m) from selling a 28 per cent stake, valuing the company at €2.9 billion. Shares in Bpost were priced at €14.50, the top end of its €12.50 to €15 range.

The initial public offering (IPO) is being closely watched by the UK government, which plans to sell Royal Mail this financial year in what could be the country’s biggest privatisation in 20 years.

One source close to the Royal Mail sale said: “It will be very reassuring to see a mail business come with such a strong performance and price towards the top of the range. That bodes well, but they are going to have some different issues.

“Royal Mail is at a very different stage. Bpost has gone through years of restructuring… Royal Mail is going to have to be positioned quite differently to Bpost.”

Since 2011, Bpost has increased automation in its sorting operations and cut the number of distribution centres as part of a restructuring drive.

Just over a third of its staff are over 50 years old and it plans to reduce its headcount by natural attrition over the next few years.

Bpost said 20.7 per cent of the offering, the largest flotation in Belgium since the 2007 listing of zinc smelter Nyrstar, was sold to retail investors in Belgium. Unusually for a European offering, about 10 per cent went to retail investors in Japan.