Royal Mail appeal waning, say analysts

[TrueBlueTerrier]

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Doubts are growing over the Government's ability to find a buyer for a 30pc stake in Royal Mail –even if Parliament approves the controversial partial-privatisation plan.

By Peter Taylor
Last Updated: 8:21PM BST 05 May 2009

Whitehall may have left it too late to secure a buyer willing to pay the sum needed to modernise the group, analysts say, with the financial crisis undermining the appeal of a stake and the capacity of prospective investors to buy in.

Deutsche Post is reported to have lost interest in a bid while it focuses on its operations at home and difficulties in other overseas markets, while competition concerns and the prospect of union resistance to cost cutting measures are increasingly lessening Dutch logistics giant TNT's appetite for a stake.

A Deutsche Post spokesman declined to say whether the German company was interested in Royal Mail. But Markus Hesse, an analyst with private banking group Sal Oppenheim in Frankfurt, said Deutsche Post management had previously indicated that it was "not the time for major acquisitions".

TNT, which had earlier expressed an interest in buying into the British group and has been widely touted as front-runner for a slice of the Royal Mail pie, was already coming up against fierce union resistance to planned cost cutting in its home market, Mr Hesse said.

TNT investors were concerned by the prospect of the company doing battle with unions in a foreign market as well, he said.

Mr Hesse said that while it was possible that the Government would find a buyer for part of Royal Mail "my perception is it will not necessarily be a 30pc stake".

A London-based analyst said both Deutsche Post and TNT "have got massive problems of their own to deal with", making a Royal Mail bid increasingly unlikely.

Another analyst said that while private equity group CVC – another prospective bidder – had experience in the mail business through its former holding in Post Danmark and current holding in Belgium's De Post, it was likely to face difficulties securing financing to buy into Royal Mail in the current environment. A person with knowledge of negotiations over possible bids said talks with CVC had not stalled but the process had become increasingly "elongated". Spokesmen for CVC and TNT declined to comment.

[rhino49]

Why don't they offer 30% of the business to the staff and allow us and the CWU a few directors seats on the board, voted on by the new "shareholders" - they would get a financial boost, a genuine interest in success from people who were best placed to influence it and an opportunity to hear how things really are away from the cosy environs of the boardroom. Or are they afraid that we would show them up for the incompetents they really are and shake up the archaic management structure that is at the root of all our problems?

[baldrick]

http://www.telegraph.co.uk/finance/news ... lysts.html

TNT investors were concerned by the prospect of the company doing battle with unions in a foreign market as well, he said.

So they are likely to be even more 'concerned' if there is more industrial action in Royal Mail. :mfo

[norbert]

http://www.telegraph.co.uk/finance/news ... lysts.html

TNT investors were concerned by the prospect of the company doing battle with unions in a foreign market as well, he said.

So they are likely to be even more 'concerned' if there is more industrial action in Royal Mail. :mfo

apparently they asked for the CWU to be considerate , apparently none of the parcel firms will touch ex RM staff , a highly unionised industry is all foreign ( no pun intended ) to them .