CVC bids 2bn for stake in Royal Mail

[TrueBlueTerrier]

http://www.telegraph.co.uk/finance/news ... -Mail.html" onclick="window.open(this.href);return false;

CVC Capital Partners has proposed paying just under £2bn for a 30pc stake in Royal Mail, ahead of a rival offer from TNT, the Dutch postal group, but far short of the Government's original target, The Sunday Telegraph has learnt.

CVC's offer, which was tabled ahead of a Government deadline several weeks ago, is understood to have been discussed in subsequent meetings with officials from the Department for Business, Enterprise and Regulatory Reform (BERR).

The private equity group, which owns a large stake in the Belgian postal service, has emerged as the favoured bidder among some key Whitehall decision-makers because it proposes the injection of a significant sum of money into the modernisation of the company's technology and other infrastructure, something the Government has said is essential if Royal Mail is to have a secure long-term future.

The only firm alternative proposal, from TNT, is focused on securing control of GLS, Royal Mail's profitable parcels arm. TNT's proposal is also thought to contain more aggressive assumptions about the extent of the influence it would have over Royal Mail's board and strategy.

A number of other potential bidders, including Deutsche Post of Germany, considered submitting proposals but decided against doing so.Securing a deal will not be straightforward for CVC, however. This weekend, officials from the Communication Workers Union (CWU) questioned the private equity group's credentials as a potential part-owner of Royal Mail because of the personal tax arrangements of some of the firm's partners.

Billy Hayes, general secretary of the CWU, said: "The Government is potentially lining up two companies which have no interest in complying with British tax contributions.

"CVC is the worst sort of outfit to hand over a successful British company to.

"They are profit obsessed and would strip Royal Mail down to its bare bones while contributing nothing to the public purse."

The second reading of the Bill for part-privatisation of Royal Mail is expected to take place in the House of Commons on June 9, where it will encounter a torrent of opposition from MPs who argue that selling part of the group to outside investors would breach a Labour manifesto commitment.

The political pressure that Gordon Brown, the Prime Minister, is experiencing as a result of the expenses scandal, has intensified calls for him to abandon the sell-off, but Lord Mandelson, the Business Secretary, has stressed his determination to press ahead with the plans.

The Government has said that the taxpayer would take on Royal Mail's pension deficit as part of a part-sale of the group.

A valuation due to be completed later in the year is expected to show that the deficit has risen to at least £9bn.

CVC, which has also owned a stake in the Danishmail group Post Danmark, declined to comment on the details of its Royal Mail bid last night.

[stokes11eg]

So, the tax-payer--i.e. us, will be resposible for the pension defecit--so we're really going to pay twice.
can we not claim our pension through 'expenses? I heard this morning another M.P. claimed back 5 quid he had paid to a charity!

[Carla]

So, the tax-payer--i.e. us, will be resposible for the pension defecit--so we're really going to pay twice.
can we not claim our pension through 'expenses? I heard this morning another M.P. claimed back 5 quid he had paid to a charity!

For many mp charity begins at westminster i.e. Line their own pockets

[pinstripe]

If the government would only give me £5bn I would buy the minority stake, they could pay me £500 million a year for my investment. Obviously I won't be re-paying the £5bn and I'll only do it if the government takes on the pension deficit.
I bet they would go for it if I had a "Sir" in front of my name.

[stokes11eg]

He.He. Change your name by deedpoll, it might work!!!

[norbert]

So, the tax-payer--i.e. us, will be resposible for the pension defecit--so we're really going to pay twice.
can we not claim our pension through 'expenses? I heard this morning another M.P. claimed back 5 quid he had paid to a charity!

http://www.no2eu.com/" onclick="window.open(this.href);return false;

Billy Hayes is spot on about the state taking up the debt and the private vultures taking the profit & CVC , they're well known for taking over the AA , slash & burn by sacking all the staff and service worsening .

:lfo was reported to be doing a deal with CVC , a lot of it got scuppered with the 2005 General Election , New Labour had to give the unions concessions in the form of The Warwick Agreement .

Apparently :lfo threatened to leave , even Blairite ministers said he was " high maintenance " which was a polite way of saying he was a pain in the arse or a prima donna . Like a cat minding pigeons

:lfo made Bullish statements like " The Warwick Agreement doesn't faze me , it's the director and shareholders that dictate " , apparently he wanted to buy RM staff off with shares bought by him - :lfo " Give them shares , they think they have a stake in the company and you can get away with paying them less " :lfo

Private Equity Firm senior management are very union hostile , they're well known for getting rid of public sector reps that they consider to be a pain in the arse , one case I read of was in a previously not for profit social sector company ; they'd make RM's much maligned Senior & Area Management look like extras from " The Sound of Music "

[stokes11eg]

Like you last sentence!!!