Royal Mail Group MBO bid for in-house arm

The Royal Mail Group is considering an MBO bid for its in-house PR division, it emerged this week.

The division – Communications Services – competes against external agencies to provide PR, internal communications, events, exhibitions and design support for the group’s three divisions: Royal Mail, the Post Office and Parcelforce Worldwide.

It is understood that an MBO bid, being led by division director Mick Kelly, is under consideration by senior group staff.

External relations director Paul Budd confirmed an MBO was an option being considered for the future of the division.

An MBO would be in line with recent structural changes, with the group outsourcing its facilities management and IT support divisions earlier this year.

Communications Services, which is separate from the Royal Mail Group’s eight-strong corporate press office and other marcoms staff, was set up in its current form six years ago.

Seventy-five of the division’s 99-strong staff are involved in internal and external PR work. Communications Services staff are based in London, Bristol, Salford and Edinburgh.

The division produces Courier, the tabloid-style monthly newspaper that is sent to the Royal Mail Group’s 200,000-plus current staff, plus former employees.

Other recent changes to the group’s PR include the halving last month of its PR spend to pounds 2.5m per year, while doubling the number of PR agencies on its roster (PRWeek, 22 November).

Meanwhile, the Post Office has hired Eventworks to handle a series of internal communications events.

Eventworks MD Jerry Starling said: ‘The Post Office must change to become a modern retail operation. Some elements are a long way from there at the moment.’

It has been revealed that the group is losing more than pounds 1m per day and this week chairman Allan Leighton became embroiled in a dispute with regulator PostComm over future pricing plans.