Lloyds share sale raises prospect of UK's complete exit by 2015
By Matt Scuffham and Steve Slater
LONDON (Reuters) - Britain could have sold the 6 percent stake in banking group Lloyds it placed with investment institutions nearly three times over, sources said, raising the prospect it could sell all its shares before the 2015 General Election.
The 3.2 billion pounds ($5 billion) divestment, five years after Lloyds and rival Royal Bank of Scotland (RBS) were bailed out at the height of the credit crunch with a combined 66 billion pounds of taxpayers' cash, represents a milestone in the economy's recovery from the financial crisis.
The sale of the Lloyds stake has long been a priority for the Conservative-led coalition government, which sees the return of Lloyds to private ownership as an important step in its plan to recover taxpayers' money.
"This is another step in the long journey in putting right what went so badly wrong in the British economy," Finance Minister George Osborne said.
"It's another step in repairing the banks, it's another step in getting the money back for the taxpayer, and it's another step in reducing our national debt," Osborne added.
The shares were sold to unnamed investment institutions at 75 pence per share, a 3 percent discount to Lloyds' closing price on Monday. Sources with direct knowledge of the transaction said it was 2.8 times covered by demand.
Given the level of investor appetite, said analyst Ian Gordon at Investec, the rest of the Lloyds shares could be sold by the next election. By comparison, the United States sold $31.8 billion worth of shares in Citigroup over a nine-month period in 2010.
"We regard the Government's timing as impeccable and it appears credible to suggest that it could yet be out in full by the election," Gordon said. Continued...