Royal Mail: Pricing of Shares

Lord Razzall Excerpts

Tuesday 22nd October 2013 Lords Chamber

[Lord Popat]

My Lords, as I said, our key objective was to secure value for money and to make sure that this flotation was successful. The nine banks that we appointed set out the criteria and gave us advice as to the value of the shares that we should pitch at. One criterion was to make sure that the future of the Royal Mail continues to be strong. The most important criterion was that institutional investors were able to invest money for the future of the Royal Mail.

[Lord Razzall (LD)]

My Lords, perhaps I may follow the noble Lord, Lord Forsyth, in extending the Question. Does the Government have a view as to what steps the regulator should take regarding the irresponsible actions of the colleague of the noble Lord, Lord Donoughue, in another place in his public comments, which had the effect of encouraging small investors to buy shares without explaining the risks involved to them?

[Lord Popat]

My Lords, the prospectus was very clear about the risks involved in acquiring these shares. With regard to small investors, we allocated around 18% to retail investors. Ninety per cent of the retail investors who applied for shares up to £10,000 took up the shares knowing what the risks would be.