France declines comment on La Poste IPO target

The French government declined on Monday 7th July to comment on a report that a possible partial privatisation of La Poste could raise 2 to 3 billion euros (USD 4.7 billion) to help prepare one of the bastions of state ownership for competition.
French President Nicolas Sarkozy’s Chief of Staff lifted a taboo on changing the ownership of the postal service, one of the country’s biggest employers with 280,000 staff, on Sunday by saying the idea of a stock market listing “deserves interest”.
The move would form part of France’s efforts to prepare itself for the liberalisation of the European postal market by 2011.
“We have no comment because La Poste has not put forward a proposal yet,” a finance ministry spokesman said.
“A flotation is one of the options being studied,” a spokeswoman for La Poste said, but said a proposal had not been made formal.
The tentative flotation plan, first reported in Le Monde last week, has angered unions already involved in sporadic strikes to defend pension rights and the 35-hour working week.
The Sud-PTT postal union said it would be “the end of the public postal service” and that a similar step taken by France Telecom had merely saddled it with massive debts.
French daily Echos said on Monday that La Poste, which generated sales of 20.8 billion euros in 2007, was looking to sell 20 percent of its share capital in a possible flotation that would value it at more than 10 billion euros.
Sarkozy’s Chief of Staff Claude Gueant warned on French radio on Sunday of the consequences of failing to respond.
“If we do nothing, very clearly it will be the German post or the Dutch post that will distribute mail in France,” he said.
France’s post office derives 56 percent of its revenues from mail services and 23 percent from its low-fee banking subsidiary La Banque Postale.
Any move towards privatisation would require changing the legal status of the French postal service, a delicate political operation that would involve turning it into a public limited company or “societe anonyme” instead of a civil service branch.
The government says any changes would not threaten La Poste’s public service status.

The French government declined on Monday 7th July to comment on a report that a possible partial privatisation of La Poste could raise 2 to 3 billion euros (USD 4.7 billion) to help prepare one of the bastions of state ownership for competition.

French President Nicolas Sarkozy’s chief of staff lifted a taboo on changing the ownership of the postal service, one of the country’s biggest employers with 280,000 staff, on Sunday by saying the idea of a stock market listing “deserves interest”.

The move would form part of France’s efforts to prepare itself for the liberalisation of the European postal market by 2011.

“We have no comment because La Poste has not put forward a proposal yet,” a finance ministry spokesman said.

“A flotation is one of the options being studied,” a spokeswoman for La Poste said, but said a proposal had not been made formal.

The tentative flotation plan, first reported in Le Monde last week, has angered unions already involved in sporadic strikes to defend pension rights and the 35-hour working week.

The Sud-PTT postal union said it would be “the end of the public postal service” and that a similar step taken by France Telecom had merely saddled it with massive debts.

French daily Echos said on Monday that La Poste, which generated sales of 20.8 billion euros in 2007, was looking to sell 20 percent of its share capital in a possible flotation that would value it at more than 10 billion euros.
Under European Union rules, most mail markets including France must be open to competition from start of 2011.

Twelve of the EU’s 27 states, mainly in eastern Europe along with Greece and Luxembourg, can delay this to 2013.

Sarkozy’s chief of staff Claude Gueant warned on French radio on Sunday of the consequences of failing to respond.

“If we do nothing, very clearly it will be the German post or the Dutch post that will distribute mail in France,” he said.

France’s post office derives 56 percent of its revenues from mail services and 23 percent from its low-fee banking subsidiary La Banque Postale.