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Mandelson Bank Wins Role On Royal Mail Sale

(c) Sky News 2013

The Wall Street firm for which Lord Mandelson, the former Business Secretary, works is poised to clinch a role advising the Coalition Government on the privatisation of Royal Mail.

I have learnt that Lazard, the investment bank, will be hired in the coming days to work alongside UBS (Berlin: UBRA.BE - news) on preparations for the biggest British privatisation in a generation.

Officials are due to finalise the terms of Lazard's appointment this week, according to insiders.

The firm, for which Lord Mandelson is the chairman of its international operations, is being brought on board to provide ministers with independent advice as a potential sell-off of Royal Mail returns to the top of the political agenda.

It is unclear whether the former Labour Business Secretary will play any role in Lazard's work on Royal Mail. Lord Mandelson led the previous attempt to privatise the postal operator in 2009, which collapsed amid deteriorating economic conditions and waning interest from rivals such as Deutsche Post (Other OTC: DPSGY - news) and TNT.

Spearheaded by Michael Fallon, the business minister, the latest effort to inject private capital into Royal Mail is likeliest to come through a stock market listing of the company.

Sky News revealed last week that Royal Mail employees would have to hold onto their shares for some time as ministers aim to avoid a repeat of the 'stagging', or immediate share sales, which blighted many of the privatisations of the 1980s.

Lazard's imminent appointment adds its name to a host of other major banks which are working on the Royal Mail sell-off. Ministers and the Shareholder Executive, which oversees state-owned companies, are keen to have an 'independent' adviser on board, since UBS is likely to be among those vying for a role in executing the flotation.

Barclays (LSE: BARC.L - news) , Bank of America Merrill Lynch and Goldman Sachs (NYSE: GS-PB - news) are all advising the Government, and have been co-ordinating a series of meetings between Royal Mail management and institutional investors.

Lazard has a long track record of work for the UK Government, having assisted with the sale of the Tote in 2011. The firm is also working on the sale of the NHS's key blood plasma supplier.

A spokesman for the Department for Business, Innovation and Skills declined to comment.