Banks' fees for Royal Mail deal are competitive
Your article stating that banks appointed by the Government will receive £30m for their work on the sale of Royal Mail (Business, May 30) is completely misleading.
We have agreed fees, which are extremely competitive compared to previous privatisations, and which represent very good value for taxpayers.
No decision has been taken as to what form a sale of Royal Mail will take. The appointed banks will only be paid if the Government decides that an initial public offering (IPO) represents the best option.
Should we proceed with an IPO and in line with normal IPO practice, these banks will receive a tiny percentage of the amount raised in the share offering, rather than a percentage of the overall market capitalisation of Royal Mail.
Royal Mail's market valuation is still to be determined, so any figures putting a value on either the company, or an IPO, are pure speculation.
As is normal practice for Government asset sales, full details of advisers' fees will be published in any IPO prospectus and we expect the National Audit Office to scrutinise them.
RT HON MICHAEL FALLON MP
Minister of State for Business and Enterprise