CVC Capital Partners makes $3.3bn bid for Royal Mail stake

Buyout house CVC Capital Partners has reportedly offered $3.3bn for a 30% stake in state-owned postal service Royal Mail.

It is reported that CVC's bid is higher than the rival offer from Dutch mail group TNT, but is still lower than the UK government's $5bn target. German mail company Deutsche Post recently dropped out of the bidding.

At the time of going to press, Parliament was set to debate legislation to partially privatise Royal Mail, which is expected to face opposition from both the Labour party and Labour unions. However, the government is insistent that the company needs private capital to survive.

CVC is said to be the preferred bidder for the struggling UK mail group, as it intends to inject a large amount of capital into modernising the company's technology and infrastructure.

The government has promised it will take on Royal Mail's pension deficit as part of the partial privatisation, which is said to be worth about $15bn.

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