UK plans to sell 7.5% of Lloyds as government seeks to cut bank stake

Britain will sell an additional 7.5% of part-nationalised Lloyds Banking Group, worth about £4.2bn (over €5bn), via a placing to institutional investors.

That is according to UK Financial Investments, which manages the government stakes in Lloyds and Royal Bank of Scotland. It said the sale would cut the government’s stake in Lloyds to 25%.

The government sold a 6% stake in Lloyds in September at a price of 75p per share, a milestone in the country’s recovery from the 2008 financial crisis, during which taxpayers pumped £66bn into Lloyds and RBS.

The size of the latest sale is in line with market expectations and the price is expected to be above the 73.6p which the government paid for the shares.

UK Financial Investments is expected to sell more shares later in the year in an offer which will include private retail investors.

Britain’s finance ministry said its priority from the sale was “getting the best value for the taxpayer, maximising support for the economy and restoring private ownership”.

“The government will only conclude a sale if these objectives are met,” a spokesman for the treasury said yesterday.

Shares in Lloyds closed at 79.11p yesterday.

Bank of America, Merrill Lynch, JP Morgan, Morgan Stanley, and UBS have been appointed to act as bookrunners.