Britain Plans I.P.O. for Postal Service

LONDON - Britain is preparing to privatize Royal Mail, the country’s postal service, whose origins date to 1516 and the carrying of post for Henry VIII and the Tudor court.

The government said on Wednesday that it had appointed Goldman Sachs and UBS as the lead banks to manage a planned initial public offering on the London Stock Exchange later this year. Barclays and Bank of America Merrill Lynch will also work on the sale. The planned offering could value Royal Mail at about £3 billion ($4.5 billion), according to some analysts.

The government has been considering a sale of Royal Mail for years, but plans became more concrete over the last year when the company’s finances started to improve. Pressure is also growing on the government to find additional savings to reduce the budget deficit.

Like other postal services, Royal Mail was hurt as more people swapped handwritten letters for e-mail. But earnings have improved recently, and the company reported that profit more than doubled for the year ended March 31 as more people shopped online and received their purchases by post.

The sale of the service, which was opened to the public by Charles I in 1635, would be the biggest privatization in Britain since the railroads in the 1990s. Royal Mail is one of Britain’s largest employers, and the government plans to set aside about 10 percent of Royal Mail’s shares to be held by its workers.

Michael Fallon, the minister for business, said in a speech last month that selling Royal Mail was a “practical, logical and commercial decision.”

“Unless Royal Mail has the capability in the future to access equity markets, every £1 that it borrows is another £1 on the national debt,” he said. “That means growing the national debt. No responsible party could propose that in the current environment.”

The Communications Union, the trade union representing postal workers, has been opposing the sale of the service, arguing it would not be in the interest of the employees and customers. Mario Dunn, who leads the union’s campaign against the sale, said: “Banks are set to make up to £30 million when the government sells off Royal Mail. Once again consumers will lose out when prices rise and deliveries are reduced but banks make millions.”

Union representatives pointed out that even former Prime Minister Margaret Thatcher, who privatized gas and telecommunications companies and British Airways, refused to consider a sale of the postal service and its stamps that feature a portrait of the queen, saying she was not going to have the queen’s head privatized.