Lloyds News Update: Shares of Lloyds Banking Group Go On Sale
Lloyds news update: Following the separation of the two entities ‘Lloyds’ and ‘TSB’, the government has sold shares as they start reprivatizing the company.
With the sale of £3.3bn worth of shares for the company being put up for sale on the 16th September 2013 the reprivatisation of the UK banking group has officially started. It has been suggested that this move marks a turnaround in the financial crisis and things can improve, financially, as of this moment.
“Five years to the day since Lloyds’ disastrous takeover of HBOS, which led to its £21bn bailout, the Treasury is set to make a profit of at least £60m on the sale of 6 per cent of the bank. The sale – the UK’s second-biggest share placing ever – is a milestone in Lloyds’ recovery, which has gathered pace in the past year as chief executive, António Horta-Osório, has steered the group back into profit.
It is also a potent symbol of the UK’s return to health after a catastrophic failure in financial markets brought the banking industry to the brink of collapse in October 2008.
Bankers in capital markets involved in the transaction reported a swift take-up of Lloyds shares. One US hedge fund was said to have submitted a $1bn order.
‘Investors are making a call on the UK,’ said one banker on the deal. ‘This level of demand would not be there if people weren’t confident in the UK’s broader economic recovery.’
Lloyds News Update
One senior Lloyds executive said the sale had ‘given us our pride back’. ‘It’s a major milestone,’ he said. ‘After getting the bank in profit and helping to support the UK economic recovery, getting taxpayers’ money back was a key target.’
For Mr Horta-Osório, the sale could also trigger a windfall. Providing the share price stays for a month above 73.6p, the average price paid by the government for its stake, he will qualify to receive last year’s £1.5m bonus award, albeit after five years.
Lloyds’ shares have soared more than 90 per cent in the past 12 months, racing past the government’s 73.6p ‘in-price’ for the first time in three years last month and fuelling expectations that the government would start the reprivatisation process.
The first tranche of Lloyds shares are expected to be sold at least 75p – a 2 per cent discount to Monday’s closing price of 77.36p but 1.4 per cent, or £60m, above the average price the government paid.
The initial placement is expected to be followed by a second sale – potentially involving retail investors – in the first half of 2014, paving the way for the government fully to exit Lloyds by the end of next year.
That timetable is in stark contrast to Royal Bank of Scotland, which is still years away from starting reprivatisation.
Around 4.3bn of Lloyds shares will be allocated to institutional investors overnight on Monday, with bankers expecting a mix of largely UK and US investors. Four of Lloyds’ largest investors – Lansdowne, Northern Cross, Harris Associates and Norges – were expected to end up with substantially increased stakes.”
To speak with Lloyds regarding any of the information listed here, contact the Lloyds customer services department using the information provided on http://www.customerservicescontact.co.uk/lloyds-customer-services/
This article was originally sourced from http://www.ft.com/cms/s/0/dd17205e-1ee8-11e3-b80b-00144feab7de.html#axzz2fLA8CnBN
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