Regulators force Lloyds to sell 631 branches which now form TSB as condition of state rescue
Lloyds Banking Group said on Friday it had sold a further 11.5 per cent stake in TSB in a share placing to investors that required no discount to the market price following strong demand.
Lloyds, which was advised by UBS, said it would sell 57.5 million shares at 280 pence, raising £161 million (€205.8 million). The sale leaves it with a 50 per cent stake in TSB, which it was ordered to sell by European regulators.
Sources familiar with the matter said demand for the shares outstripped the number available several times over enabling Lloyds to sell the shares to mainly long-term investors.
The sale attracted interest from investors in the United States as well as Europe and buyers had been found to cover the sale within an hour of it being launched after the market closed on Thursday.
Investors were attracted by an exposure to Britain’s economic recovery via a bank which is untainted by issues of past misconduct. They see TSB as a viable challenger to Britain’s ‘big 4’ banks – Lloyds, Royal Bank of Scotland, Barclays and HSBC.
Reuters reported on Tuesday that Lloyds was preparing to launch a second TSB stake sale.
Lloyds sold a 38.5 per cent stake in TSB in June at 260 pence per share through an initial public offering, which valued Britain’s seventh-largest bank at £1.3 billion.
European regulators forced Lloyds to sell the 631 branches which now form TSB as a condition for getting a £20.5 billion government rescue during the financial crisis.
TSB is one of a number of British banks that have either recently listed on the stock exchange or are preparing to do so, tapping investor appetite for newcomers aiming to challenge the established banks.
Aldermore said on Monday that it planned to list in London next month, in a debut that could value it at up to 900 million pounds.
Virgin Money, backed by entrepreneur Richard Branson, is expected to list later this year.
Lloyds faces a deadline to sell its entire stake in TSB by the end of 2015. Industry sources say it is possible the remaining shares could be sold in two stages.
Lloyds has said it will sell no shares in the bank for 90 days following the latest placing.