CVC Partners beats TNT's bid for Royal Mail

01 June 2009

Private equity group CVC Partners, the second bidder for the UK state-owned postal group Royal Mail has offered to pay nearly £2 billion for a 30 per cent stake, much more than TNT's offer, but both the bids still falls far short of the £3 billion that the UK government is seeking.

In July 2005, CVC acquired a 22-per cent stake in Post Danmark from the Danish State and in 2006 a 49 per cent stake in De Post La Poste (Belgian Post)

The Sunday Telegraph reported that CVC Partners had made an offer of nearly £2 billion for a 30 per cent stake the UK's Royal Mail, which is better than the offer made by TNT.

The UK government's plans to part-privatise the state-owned postal operator had bought angry response from the unions, backbench Labour MPs and Labour Party supporters who have vowed to block the governments proposal to sell a minority stake in Royal Mail to a foreign bidder.

A review conducted by Richard Hopper, a former deputy chairman of Britain's media watchdog, had suggested that the government should close half of its 71 mail centres and barring Royal Mails retail outlets all other operations needed to be part privatised in order to be commercially viable.

The British parliament will vote on a bill to sell a minority stake in Royal in June, which is expected to face opposition even from Prime Minister Gordon Brown's own party.