Controversies about privatization have re-entered British politics in recent years. In this paper we examine a neglected case in the early history of privatization in the UK: the 1980 disposal of the controlling interest in Ferranti held by the National Enterprise Board, a state holding company. Ferranti, a large, long-established and family-controlled British electronics company with a distinctive management tradition, had fallen under government control after a cash crisis in 1974-75, but new management turned the company around. In 1980 the stake was distributed widely to institutional shareholders, a method very deliberately intended to reconcile numerous interests. A sale to a single bidder could have realized significantly higher proceeds, but at the price of antagonizing management and employees, and with the potential for higher costs in defense procurement and serious political damage from job losses. The disposal came very early in Margaret Thatcher’s administration before it had accumulated significant experience of privatization. We argue that this case offers significant insights into the development of privatization policy and practice and the state’s wider role in British business. The involvement of some of Britain’s most controversial post-World War Two politicians adds a strong ideological dimension.