The government wants to convince up to 2 million people to buy NatWest shares when it sells its stake in the bank.
The company has asked marketing firms to pitch to run the publicity campaign for the sale to create buzz similar to John Lewis Christmas ads.
The City will be surprised by the size of the government’s plan to sell shares at retail. If it is achieved, NatWest would have an army of retail investors comparable to that of Lloyds Banking Group which has 2.3 million. The largest retail shareholder base of any London listed company, it is due to the 1997 demutualisation, where members received free shares, of Halifax Building Society. Lloyds now effectively owns Halifax.
Since the chancellor announced in his autumn statement he would look at options to sell its shares, rumors have been circulating in the City about the government’s intention.
Jeremy Hunt stated that it was “time to get Sid investing again”, referring to the advertisement campaign for the privatisation of British Gas in 1986. A budget update may be included in the March 6th budget, but the plan calls for the sale of shares to begin as early as June.
The government awarded a contract for market research to Walnut Unlimited in order to gauge the public’s interest in the shares. The company had to complete its research by last week. The shares are expected to be sold at a discounted price from the current market value to attract investors.
The Treasury stated: “We will be exploring options to offer a NatWest retail product over the next twelve months, depending on market conditions and value for money.”