Royal Mail postbox in central London
Britain's Royal Mail will be valued at £3.3 billion ($5.3 billion, 3.9 billion euros) when it launches on the stock market in a controversial part-privatisation, the government said Thursday.
The offer price was set at 330 pence per share, which was
at the top of the expected range of between 300-330 pence, it said in a statement.
British Prime Minister David Cameron said he wanted the privatisation to be a piece of "popular capitalism" that would also allow Royal Mail to invest in the business.
One third of the stake has been allocated to retail investors -- excluding shares being given to employees -- while the remainder will be sold to institutional investors, such as pension funds, insurers and hedge funds.
The government's future holding in Royal Mail will be reduced to 37.8 percent. Employees will receive 10 percent of the shares free of charge, as previously stated.
Full trading of the shares on the London Stock Exchange will start on October 15.
The government's Business Secretary Vince Cable, a Liberal Democrat, stressed that the deal would preserve the Royal Mail's one-price-goes-anywhere universal postal service.
"Our priority has always been protection of the consumer through the universal service obligation, good value for money for the taxpayer, and a stable long term ownership structure that will enable Royal Mail to be a successful enterprise and to raise commercial funding to invest. This listing achieves all of these objectives," Cable said.
"We have struck the right balance, increasing the proportion o shares going to small investors to ensure they get their fair share and ensuring the employees get a 10-percent stake in the business."
All retail investors who applied for between the £750 minimum and £10,000 worth of shares will meanwhile receive 227 shares worth £749.10.
That means that more than 690,000 members of the public, or almost 95 percent of people who applied, will pick up stock.
However, retail investors applying for more than £10,000 worth of shares will get none after the offer was seven times over-subscribed, according to the statement.
The Conservative-Liberal Democrat coalition administration had last month launched plans to sell off more than half of the state-run postal service in Britain's biggest privatisation in decades.
The announcement forms part of the government's strategy to slash the budget deficit, but has sparked anger from trade unions who argue that privatisation will provide a worse service for customers and are threatening to strike.
"I want to see the Royal Mail share sale be a big success and I want it to be a success for Royal Mail and their employees, almost all of whom will be taking part in having shares," added Cameron on Thursday.
"The point of this privatisation is to allow this company to compete with the many other companies that deliver parcels around the country.
"It needs access to private capital, access to private management, it needs more money into the business, and all this will become possible.
"Part of that is having more shareholders and I hope as many people as possible who have applied will be able to get those shares.
"I want it to be a piece of popular capitalism and I'm sure that's what will happen."