ABSTRACT
This chapter focuses on objectives and techniques that have been used in the United Kingdom, many of which have subsequently been adopted for use elsewhere. The original rationale for the British privatisation programme was primarily economic. The underwriting process in London generally works as follows. An issuing house, or group of houses enters into a binding agreement to acquire a number of shares at a given price. Privatisations are unlike any other financial transactions. In order to understand the financial processes of privatisation, it is necessary to establish the objectives which underlie most privatisation programmes and then to attempt to reconcile these objectives with techniques available in the market. Fair pricing which balances the needs of the taxpayer and the investor, voucher offers for customers, free shares for employees, retaining the privatised company’s corporate structure, widespread distribution of shares, full disclosure of information, and careful attention to detail may all be necessary if a successful sale is to be achieved.
