Britain's first privatisation, Amersham, was a test that ran hot

Amersham International was one of the very first acts of privatisation under Margaret Thatcher. The Radiochemical Centre, a state business spun out of the Atomic Energy Authority, was floated as Amersham International Ltd in February 1982. Much smaller than the telecoms, gas, electricity and air travel privatisations that followed, it was nonetheless a first, experimental test of the flagship Thatcherite policy, and it became the main case study in the Science Policy under Thatcher account of 'radioactive privatisations'.

The flotation was over-subscribed, but pricing became a controversy. In Parliament on 8 March 1982 the government said it was satisfied Rothschild's, the merchant bank, had given its best advice on pricing. Critics, pointing to an Investors Chronicle prediction of a 30p premium over the 142p issue price, asked why neither the Secretary of State nor the advisers priced it higher. The response was that a lower price spread the issue well among smaller investors — and that a tender or higher price might have yielded the government less.

Amersham's employees were among the first to become shareholders in a privatised business. The company then expanded in medical diagnostics and radio-pharmaceuticals, building a global niche business.

The Feb 1982 flotation of Amersham International was over-subscribed and gave the state a fair price; it rose from roughly £45m to a £5.8bn takeover by GE in 2003.

It was the test case: a small state firm used to prove the big privatisation policy could be demonstrated.

Over-subscription and widespread retail and employee ownership showed the public would buy what the state sold.

A business with a genuine niche — medical isotopes and radio-pharmaceuticals — could be sold as a real enterprise, not just a policy exercise.

The first test of a big policy is the most exposing: a successful but underpriced flotation still showed the state could sell and the market would buy, setting the template.

Amersham grew into a leader in medical diagnostics and radio-pharmaceuticals, and was bought by General Electric for £5.8bn in 2003, a huge return on the £45m value at its 1982 flotation. The controversy over the underpricing became a recurring critique of early UK privatisations: selling too low transferred value from the state to early buyers. But Amersham's success also proved that a state-owned niche business could be floated and then scaled up as a private company.