Royal Mail Shares Priced at High End

LONDON - Shares of Royal Mail were priced on Thursday at the top of end of the government’s original range, valuing the company at $5.3 billion.

In the biggest privatization since the government sold the railways in the 1990s, shares of the postal service were priced at 330 pence, or $5.28, each.

“The buzz is huge,” said David Scott, a stockbroker at Redmayne Bentley, which has been handing out information fliers about the pending share sale on London streets. “There hasn’t been a privatization of that magnitude in a long while, and people think they can make an instant gain. We’ve been absolutely inundated with calls from clients.”

Wagers placed with some spread-betting operators, including IG Markets, indicated that the shares could rise by 30 percent when trading starts. Mr. Scott said many investors made large gains from the privatizations of the 1980s, including the sale of British Telecom in 1984, British Gas in 1986 and some regional electricity companies, and are now hoping to repeat that with Royal Mail.

But not everyone is looking forward to the sale. The Communication Workers Union, which represents some Royal Mail employees, said Thursday it would continue its opposition against the sale even after more than 99 percent of Royal Mail staff accepted an offer for free shares in the company. When the government decided to sell shares in Royal Mail last month, it said about 150,000 Royal Mail employees would be offered free shares worth 10 percent of the company.

The offering leaves the government with a 38 percent stake, it said on Thursday, but this could fall to 30 percent should it choose to exercise an overallotment option. The government made 33 percent of shares available to the public, more than the 30 percent it had expected, after the sale was oversubscribed seven times. Institutional investors have 67 percent of the offering.

Royal Mail’s share sale received additional public attention earlier this week when the business secretary, Vince Cable of the Liberal Democrats, clashed with his counterpart of the opposition Labour Party, Chuka Umunna, over the stock price. The Labour Party contends that Royal Mail was being sold too cheaply and that many retail investors would lose out.

The government is “selling this at a huge undervalue,” Mr. Umunna said in a television interview on Monday, indicating the company might be worth an extra 1 billion pounds. The share sale was “a dream” for speculators “but an absolute nightmare for taxpayers.”

Royal Mail’s roots date back to the court of Henry VIII in the 16th century.