Lloyds shares hit two-year high on overseas buyers' interest

Mon Jul 8, 2013 7:27am EDT
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By Steve Slater

LONDON (Reuters) - Lloyds Banking Group (LLOY.L: Quote) shares jumped to a 2-1/2 year high on Monday as overseas investors stepped up their interest in buying part of the bank, with media reports suggesting some may want half the government's stake.

Former Standard Chartered (STAN.L: Quote) chief executive Mervyn Davies is talking to others about forming a consortium to be an "anchor" or cornerstone investor in part-nationalized Lloyds which the government is planning to sell, a person familiar with the matter said.

Davies is a partner at U.S. private equity firm Corsair Capital. It was too early to say how big a stake any consortium might want, the source said.

Sky News said a Corsair-led consortium of sovereign wealth funds and financial firms could buy up to 10 billion pounds ($14.9 billion) of Lloyds, or half the government's 39 percent stake.

The government has received a number of tentative enquiries about the sale, including from overseas investors, a person familiar with the matter said on Sunday.

Britain is keen to start selling its 20 billion pound holding in Lloyds this year, and dozens of top investment banks will pitch for the job of handling the sale by a Treasury deadline on Monday.

The Sunday Times said Singapore state investor Temasek TEM.UL had made an approach about buying a 4.5 billion pound stake in Lloyds, although industry sources said there had been no direct approach to the British government.

By 1030 GMT Lloyds shares were up 2.8 percent at 66.4 pence, after hitting 66.6p, their highest level since February 2011 and comfortably above the 61.2p level the government regards as its break-even price.   Continued...

A pedestrian passes the head office of Lloyds Banking Group in central London April 11, 2011. REUTERS/Stefan Wermuth