CVC shuffles postal assets

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CVC Capital Partners, the private equity group, has shuffled its European postal assets, selling its stake in the Danish post office and increasing its stake in the Belgian one as it considers an investment in Royal Mail of the UK.

The moves are part of Post Danmark’s merger with Posten AB, the Swedish post office, which was announced in April 2008 and is due to be completed this year.

CVC has agreed to sell its 22 per cent stake in Post Danmark to the Danish government.

In return, the Danish group will sell CVC its share of the 50 per cent minus one share of Belgium’s De Post-La Poste that they jointly own. CVC, which is based in London, said it would pay €373m ($478m) for Post Danmark’s interest in the Belgian company. It did not disclose the amount it would receive for its holding in Post Danmark.

One of the drivers behind the deal is the likelihood that European competition regulators will force Post Danmark to sell its stake in its Belgian rival to win approval for its merger with Posten AB of Sweden.

CVC said it had decided to sell its stake in the Danish group because the merger with Posten AB would have diluted its stake to an unacceptably small level.

Having picked up stakes in the Danish and Belgian post offices as part of their privatisations in 2005, CVC has gained first-hand experience of the postal industry, making it one of the favourites to invest in Royal Mail’s part-privatisation.

The UK government is looking for a private sector investor that could take as much as a one-third stake in Royal Mail. TNT, the Dutch postal group, is one of the international competitors to express an interest in a potential deal.

TNT is being advised by Allen & Overy, the law firm, while CVC is working with Clifford Chance on legal advice about a potential approach.

Unions have reacted angrily to the prospect of a partial privatisation of Royal Mail as any sale is expected to be a precursor to job cuts at the UK post office.

CVC declined to comment.