Things haven't let up for Vince Cable and Michael Fallon (pictured) as the pair continue to be quizzed by MPs on the sell-off of the Royal Mail.
Both Cable and Fallon remained adamant that, although alternatives to the initial public offering (IPO) were explored, market circumstances meant the company was priced correctly. The government has been accused of selling it too cheaply after shares soared when trading began last month.
Business secretary Vince Cable said that more could have been raised if shares has been sold to anyone, rather than responsible, long-term investors, but that they were needed to protect the future of the Royal Mail.
Cable had dismissed the early gains as "froth" (emphasising today that he was glad he used that word), saying that the true value of the shares would take months to emerge. He said: "You are talking about the current short-term price, we have to look at these things in a longer term context." He went on to say that the performance of the IPO, including the value for money for taxpayers, will determine whether banks are paid the £4m bonus fee - so the wait could be months or years.
The government's Shareholder Executive (ShEx) said it chose to retain a 30 per cent stake because it believed the value of the company would go up over time. Committee chair Adrian Bailey accused Mark Russell of the ShEx of being gullible when it came to dealing with UBS and Goldman Sachs, although Russell said he was satisfied with the advice he received from the banks.
When it came to raising the IPO float from 330p to 350p, business minister Michael Fallon said the extra £200m was considered, but the government decided it was not worth the risk. He added that overpricing the Royal Mail could have delayed the IPO by over a year, which would have jeopardised the six-days-a-week postal service. Lazard chief executive William Rucker said raising the price would have been difficult and could have disrupted the float.
Questions on over-subscription saw Rucker explaining that the 20 times oversubscription by City investors cannot necessarily be taken seriously - lots of "gaming" goes on, he said. He agreed that the Royal Mail was unusually over-subscribed, at seven times the retail level.
Bailey asked about the Guardian's report that law firm Clifford Chance is currently analysing Royal Mail's property portfolio. Russell declined to comment.