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Business

Royal Mail market debut sends shares soaring in London

Britain's Royal Mail shares have been up rapidly after their London stock market debut. The controversial privatization continued to draw criticism from unions and others and may have been priced too cheaply.

Royal Mail shares were up sharply Friday when trading started in the London stock market. Investors saw the price up to 36 percent above privatization value levels.

The hugely oversubscribed sale of a majority stake was priced 330 pence (3.89 euros, $5.26) per share a day earlier, but opened at 450 pence in London on Friday morning.

Market pundits said the significant increase in value would fuel a protracted debate whether the sale as one of Britain's largest privatizations in decades was priced too cheaply.

Unions not amused

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There had been massive criticism from the opposition Labour party that the government was short-changing taxpayers.

Union members had also opposed the sale and are currently balloting for strike action. "There are no celebrations in delivery offices around the country today," Communication Workers Union General Secretary Billy Hayes told BBC Radio.

"The real test of whether the staff are happy with this privatization will be next Wednesday when we expect to declare a yes vote for strike action," Hayes added.

The government still holds a 38-percent stake in Royal Mail, but the percentage could drop to 30 percent, should it choose to exercise an over-allotment option under which extra stock could be sold, if there's a strong demand at hand.

hg/kms (dpa, Reuters)

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