Royal Mail in a falling market
On 22 October last year, Gerry Sutcliffe, the sports minister, told MPs that the privatisation of the Tote - the horse race betting business - would be shelved for the foreseeable future. These were his reasons:
"In my Ministerial Written Statement on 21 July I said that, whilst the Government remained of the view that it should remove itself from detailed involvement in the affairs of the racing and bookmaking industries, the Government would need to be satisfied that it was right to proceed with a sale in the light of prevailing market conditions.
"After further work over the summer, I have now concluded that it is not appropriate to pursue a sale in these market conditions. I have therefore decided that the Tote should be retained in public ownership for the medium-term, and brought to the market when conditions are likely to deliver value for the tax payer and racing."
Sutcliffe seems to have read the market pretty well.
And market conditions have not yet improved sufficiently for the government to want to flog off the Tote - even though it's widely viewed as a highly attractive business.
Curiously, less than two months after the Tote disposal was shelved, and at a time when the economy was in freefall and credit was almost impossible to obtain, Peter Mandelson took a rather different view of the state of the marketplace.
He embarked on his auction of a sizeable stake in Royal Mail.
Which can only show, I think, that he rather likes making bets on 100-to-1 outsiders.
Perhaps he believed that a tentative offer from TNT, the Dutch post office, was more serious than it turned out to be. But even if he did somehow persuade himself that TNT was unlikely to walk away - which is what it has done - he surely can't have expected there to be any serious competitive tension in the auction.
It was fairly clear at the time that the going would get tougher for almost all possible bidders from the postal industry, such that their appetite for a substantial acquisition could well shrink to nothing.
That said, in view of CVC's sizeable investment in continental postal services, that private-equity firm was always likely to make an opportunistic bid. However CVC's partners did not become stupendously wealthy by overpaying for assets.
So a decent price could not possibly be extracted for the taxpayer if CVC ended up bidding against itself - which was the predictable outcome.
It's possible to say, and not just with the benefit of hindsight, that Peter Mandelson took quite a punt when pressing ahead with the partial privatisation of Royal Mail. And what he wagered - according to some of his colleagues - was the unity of his party at a time when political conditions were as fraught and unstable as market conditions.
Doubtless, now that he's shelved the sale, they'll carry him shoulder high as a hero once more.