Italy privatisation values post office at €8.8bn

Italy revealed Friday the price for a partial privatisation of the post office, which values the business at 8.8 billion euros ($9.7 billion) and delivers a boost to debt-laden state coffers.

Describing it as the biggest privatisation in Europe this year, Finance Minister Pier Carlo Padoan hailed the "success" of the initial public offering and said it was proof of people's confidence in the post office's plans and in the government's economic strategy.

"Resources obtained will go to bringing down public debt," the minister said.

The post office sale could bring in as much as 3.36 billion euros for the government but is unlikely to make a big dent in the country's debt, which stands at 2.2 trillion euros.

The Italian government is putting 34.7 percent of the fully state-owned Post Italiane up for sale, with about one-third reserved for individuals and the group's 143,000 employees -- of whom more than 26,000 have sought shares.

The shares are scheduled to begin trading on the stock exchange on Tuesday.

Demand for post office shares outstripped supply 3.3 times, the finance ministry said, resulting in a price of 6.75 euros a share -- in the middle of the anticipated range.

The share price values the entire post office at 8.82 billion euros.

The sale may be expanded to 38.2 percent of the post office, depending on how the shares trade. That means the government could raise a maximum of 3.36 billion euros from the float.

Financial news agency Radiocor said new shareholders of the post office would include Chinese sovereign funds China Investment Corporation and State Administration of Foreign Exchange as well as Kuwait Investment Office and Norway's Norges Bank, none of which would own more than two percent.

US investment manager Blackrock and US billionaire business magnate George Soros would also take a stake, it said.

Following the post office, Italy is set to sell off part of the air traffic controller and railways, the finance minister said.