October 9th, 2013

SKETCH: Royal Mail Offer Price – Political or Economic?
Vince Cable in Front of Business Innovation and Skills

In view of the offer being so over-subscribed, the question the committee repeatedly asked was: is the Royal Mail offer undervalued?

Vince Cable said that was the sort of observation made by grey-market, fly-by-night, speculating outliers on the fringes of the financial community and his irresponsible opposite number (Chuka Umunna).

He didn’t carry the committee.

Adrian Bailey in the chair said he had been an auctioneer in a previous life. “If I pitched a price and thirty hands went up I’d know I’d underpriced it.”

The minister thought that to float shares wasn’t an auction. In what way he didn’t say.

Labour and Tory members wanted to know how he would judge whether he had underpriced the issue. If the price went up 10, 20, 40, 50 per cent, would that cause him to blush at all? He was going to ignore such froth, he said. He wasn’t going to take a snapshot seriously.

Prices, pah!

But what about the 23 acres of prime London property that might be sold for billions by a clever asset-stripping management in a rocketing market?

The minister said such an outcome would assume a serious error had been made in the valuation. “And I don’t buy that,” he said.

Neither do. I can’t afford it.


  1. 1
    A Taxpayer says:

    I don’t remember when Vince Cable last looked like he had a clue


  2. 2
    Northern Chap says:

    Quality stuff. Makes a change from the usual shoddy writing on this site.


    • 8
      EC1 PhD says:

      Sentence: makes sense.
      Words omitted: none.
      Grammatical errors: none.
      Quality writers on Guido’s blog: one.
      Thought of Guido going behind the paywall: priceless.


      • 48
        Gidders says:

        Most things Murdoch are paywalled what makes Geedes any different? The old one if you can remember that far back actually tried making it private, you had to submit your email addy, I why he went back public?


    • 14
      Paniagua v5 says:

      Lets reserve final judgment to see how he wordsmiths until after a Guido Friday 3 bottle lunch.


    • 22
      Grammar school boy says:

      [He was going to ignore such froth, he said. He wasn’t going to take a snapshot seriously.]

      Should there not be some of these thingies ” somewhere?


      • 55
        Headmistress says:

        No. This is what is known as ‘reported speech’. Useless grammar school you seem to have attended if they did not teach you that!


  3. 3
    Teifion says:

    so poor likkle me has bought £1000 and the moneys gone from my account, will I make an?y money from this


  4. 4
    Casual Observer 3 says:

    Under pricing is probably more political.

    When it gets bid up to proper price there will be profit to be had, but the benefit to government in terms of the ‘good’ figures and keeping the postal workers who receive shares quiet – averting industrial action – is more important.

    The public purse doesn’t really care too much about the thing being sold off at a loss as they will recoup over time.


    • 21
      brian says:

      First of all I am a Postman. So read this in that context.

      The public purse should care-we were profitable and could of been for years. Money earned by RM in 7 years will cover what the share price is, especially if you deduct fees. The assets that will be stripped could of been sold previously and the money gone to Taxpayer and RM.

      This was always going to be cheap as chips. They have not rationalised their property portfolio for years. Mount Pleasant should of shut down years ago by their own criteria. Now for the new owners it is the biggest bit of undeveloped real estate in Central London.

      The office I work at is 25% empty space., It is a prime site. We will most probably move to a rented unit on a nearby factory estate- which makes sense but would made sense 2 years ago.

      A sell and leaseback of remaining property will recoup most of the original asking price.

      One of the problems of Royal Mail has been management has been running the business in preparation of this day, not for the benefit of the customer. And this goes back to the time of Bill Cockburn

      Bad management decisions and poor industrial relations have plagued RM for years


      • 32
        Casual Observer 3 says:

        It has been clear what the game plan was for RM for a long time now.

        EU regulations have forced this sale.

        Agree the public purse should care, but that purse will recoup the apparent loss of the sale over time. RM staff should care as the low ball price devalues the effort they have put in which probably compounds the poor management decisions that they have witnessed driving the service into the ground over the past 20 years.

        However, they will probably forget that when the shares they pick up triple or more in value.

        The worst case for the government is that after an initial price the share price drops below the issuing price, like what happened with F’acebook, and disturbingly R’IM recently.

        The privatization of RM is a huge strategic blunder. But compared to the cluster-fuck that is energy policy, this is small beans.


        • 50
          Gidders says:

          Anyone remember Railtrack, there was a huge property port folio, lots were sold off, directors made pots of cash the shares went to £20 and the train hit the buffers and so did the shares.


      • 35
        Jabba Le Chat says:

        “Bad management decisions and poor industrial relations have plagued RM for years”

        Lolz, and the staff working at all levels of RM are utter and total wankers, unfit for purpose and unemployable outside the public sector. Until Deutsch Post buys up RM and gives it a serious kicking in the arse RM ain’t going anywhere…


  5. 5
    Westmonster says:

    Governments are never happy dealing with open markets.

    That, and the opportunity for bribes and directorships, is why they prefer the company of crony capitalists and cartels.


    • 7
      Mustapha Djinn says:

      You sir, are sceptic. The Honourable and Right Honourable members of the Government would never stoop to such self serving behaviour. Even their expenses are fully justified.


      • 12
        Casual Observer 3 says:

        They ceased being honorable in the eyes of the people after the scale of the expenses scandal became clear.

        At present the majority of MPs are thieves who really are in it together.

        They will be held to account eventually.


        • 57
          Hejoocashun says:

          Oh no! They ceased to be regarded as ‘honourable’ long before that scandal, which was merely the icing on the cake.


  6. 6
    Aechmophorus says:

    If Vince Cable and Chuka Umunna are on opposite sides, where is right to be found?


  7. 9
    Doris Goldblatt says:

    Pinocchio is Italian for “pine eye.”


  8. 15
    Incapable Vince, deputy Chief Cockroach says:

    Captain Clegg, I’m out of my depth, all at sea. Not waving but drowning.


  9. 16
    Translation says:

    So what this leftie’s basically saying is: When it comes to islamic terrorism, we shouldn’t talk about islamic terrorists, even though this was an attack by islamic terrorists.


    • 24
      David Minibanana says:

      Self-loathing socialists have a lot of reasons to hate themselves. Their Union bosses gave them Red Ed.


    • 25
      Casual Observer 3 says:

      Will Self was talking absolute shit.

      Gove’s put down is justified and instructive.

      The domestic threat of J’ihadists within the UK should be regarded as an insurgency and standard counterinsurgency (COIN) tactics should be deployed to deal with it as the threat increases.

      As each day passes the UK gets a day closer to an attack from within.


  10. 17
    Light Green touch paper and take cover says:

    Today is the first day that Green energy policies have been openly criticised in Parliament and about time too.

    I predict that this will not have escaped the minority Green Mafia and the self appointed Guardians in Guardian towers. The howls of outrage will be deafening and the BBC will execute operation green defence.


  11. 18
    A nincumpoop says:

    Better, Simon, better.

    Pity about the penultimate sentence’s error.

    This online world is scary. Press ‘Publish’ too soon and you look like at wat.


  12. 19
    Merdi Hasan says:

    I have never written a begging letter to the Daily Mail. More lies by western cattle. And I have never called non-muslims cattle. That’s yet more lies by western cattle.


  13. 20
    Ed Dafty, LimpDim MP, Climate Change Chieftain says:



  14. 38
    Me above says:

    Eye saw that but didn’t know which penultimate you were referring to.


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