Ministers offer Royal Mail concessions to attract bids

by Nikki Sandison, Marketing Direct 13-May-09, 08:00

LONDON - Ministers are offering overall control over the appointment of Royal Mail's chief executive and other key operational matters to a minority shareholder, in an attempt to attract bids from foreign rivals.

In an official response to a critical report by the business select committee, the Government has agreed to offer the successful bidder a "meaningful say in the running of the business", according to the Financial Times.

The new shareholder will be able to appoint a minority of board members and have a "shared responsibility" with ministers on choosing the chief executive.

Ministers will also agree Royal Mail's "business plan and future strategy" with the shareholder, giving it particular say on the "modernisation of working methods".

The concessions offered to attract foreign rivals to bid for a 30% stake in the postal operator are likely to fuel the political row brewing over the part privatisation.

Almost 150 Labour MPs have signed a parliamentary motion opposing the plans, suggesting that Gordon Brown will be forced to rely on Conservative support to get the legislation through the Commons.