UK kicks off Lloyds bank share sale

Mon Sep 16, 2013 6:28pm EDT
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By Steve Slater and Matt Scuffham

LONDON (Reuters) - Britain will sell a 6 percent stake in part-nationalized Lloyds Banking Group (LLOY.L: Quote) at a price of at least 75 pence per share, raising over 3.2 billion pounds ($5.1 billion), three sources familiar with the transaction said.

UK Financial Investments launched the sale of the government's shares in Lloyds earlier on Monday, a milestone in the country's recovery from the 2008 financial crisis, during which taxpayers pumped a combined 66 billion pounds into Lloyds and Royal Bank of Scotland (RBS.L: Quote).

"We want to get the best value for the taxpayer, maximize support for the economy and restore them to private ownership," a Treasury spokesman said.

Britain pumped 20.5 billion pounds into Lloyds during the crisis, leaving taxpayers holding a 38.7 percent stake. The sale will reduce its stake to 32.7 percent.

Although the size of the stake being sold is lower than some analysts had expected, it is still comfortably above that of the Royal Mail, which is expected to raise between 2 and 3 billion pounds in its upcoming privatization.

"It's a great signal it has been kicked off, the wheels have started to turn," said Chirantan Barua, analyst at Bernstein.

Shares in Lloyds closed on Monday at 77.36 pence and the average price at which the government bought the shares was 73.6 pence.

Labour finance spokesman Chris Leslie said the sale should be used to repay national debt.   Continued...

A pedestrian is seen passing the head office of the Lloyds Banking Group in central London in this August 5, 2009 file photograph. REUTERS/Stefan Wermuth/Files