Lloyds share price: Treasury eyes £5 billion institutional share sale in April

on Feb 4, 2014
Updated: Apr 9, 2020
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iNVEZZ.com, Tuesday, February 4: The sale of the next tranche of shares from the remaining taxpayer-owned 33 percent stake in Lloyds Banking Group plc (LON:LLOY) could come in early April, The Times reported today.

Lloyds share price was up 0.78 percent at 80.61p as of 10:15 UTC. This compared with a 2.48 percent decline in the Financials sector and a 0.13 percent fall in the blue chip FTSE 100 index.

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The newspaper said it has learnt that the government is pushing ahead with plans to sell £5 billion of Lloyds shares by Easter despite a tough stance by the Prudential Regulation Authority (PRA), which has thwarted the bailed-out bank’s hopes to resume dividend payments next month after a six-year pause. Most analysts and investors had expected the bank to announce a small dividend for 2013 alongside its full-year results on February 13.

According to The Times, work on the prospectus for a share sale in April sale has begun. The price will be determined by a bookbuilding process with institutional investors. A bigger offer of up to £10 billion of Lloyds shares to small investors has been planned for September or October, with a large-scale promotion to members of the general public and a firm offer price to be announced before the sale.

While the PRA is insisting that Lloyds shouldn’t even make a token dividend payout for 2013 and instead reserve cash to boost its capital, the Treasury is keen to to return it to full private ownership in the run-up to the next general election in 2015. The government offloaded a six percent stake in Lloyds to large investors in September last year, raising £3.2 billion. That sale saw the taxpayer’s stake reduced from 39 percent to 33 percent.

The prospect of a resumption of dividend is key to making Lloyds shares attractive to investors but yesterday the banking group said it is preparing to resume dividend payments only in the second half of this year and announced another huge provision for mis-selling payment protection insurance (Lloyds share price drops as dividend hopes fade). Although the bank increased the amount it set aside for past misdemeanours, it also said underlying profits for 2013 would be £6.2 billion – £400 million higher than City forecasts, double the amount it made in 2012 and nearly twice as much as analysts had been expecting.

**As of 10:47 UTC buy Lloyds shares at 79.98p**
**As of 10:47 UTC sell Lloyds shares at 79.95p**
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