UK plans 1980s-style sale of Lloyds shares to Britons

Mon Jun 1, 2015 5:48am EDT
 
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By Matt Scuffham

LONDON (Reuters) - Britain will launch a sale of shares in Lloyds (LLOY.L: Quote) to private retail investors in the next 12 months in what is expected to be the biggest privatization since Margaret Thatcher's government sold off assets in the 1980s.

It has also extended a facility enabling it to sell more shares in the bank to financial institutions as it disposes of its remaining stake of less than 19 percent in the bailed-out lender, worth about 12 billion pounds ($18 billion).

As well as raising money for the state, the 1980s sales aimed to encourage ordinary Britons to invest in companies, an aspiration shared by the current Conservative government.

Thatcher's Conservative government sold 3.9 billion pounds of shares in British Telecom and 5.6 billion pounds worth of British Gas shares in deals that gave many Britons their first taste of the stock market.

Lloyds was bailed out at a cost to taxpayers of 20 billion pounds during the 2007-9 financial crisis, leaving the government initially holding a 41 percent stake in the bank.

UK Financial Investments (UKFI), which manages the government's stakes in bailed-out banks, has extended a 'trading plan' that allows Morgan Stanley (MS.N: Quote) to sell Lloyds shares beyond its current June 30 deadline until the end of the year.

It has so far raised 3.5 billion pounds through the plan since it was launched last December, bringing the total raised from the sale of Lloyds shares to 10.5 billion pounds.

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A man walks past the entrance to the head office of Lloyds Banking Group in the City of London December 11, 2013. REUTERS/Olivia Harris