This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: U.K. Raises $5.1B Through Lloyds Selldown

Stocks in this article: LYG

LONDON ( The Deal) -- The British government's UK Financial Investments Ltd. said Tuesday, Sept. 17, it had sold a 6% stake in Lloyds Banking Group (LYG) for just over over 3.2 billion pounds ($5.1 billion).

Monday's long-awaited accelerated bookbuilding exercise to institutional investors marked UKFI's first selldown of shares in Lloyds, which the previous Labour government had rescued in January 2009 after arranging for it to take over troubled peer HBOS.

Shares changed hands for 75 pence, above the "blended" 73.6 pence which the government is estimated to have paid for its stake, meaning the Conservative/Liberal Democrat coalition government should be able to declare it has made a profit of about 60 million pounds on the transaction. The stock was priced at a 3.1% discount to Monday's close. Before Monday, Lloyds shares had risen about 25% in the past three months and are close to a five-year high.

The sale leaves UKFI, the vehicle which manages state banking holdings accrued during the credit crisis, with 32.7% of Lloyds. UKFI is bound by a 90-day lockup on its remaining shares but the restriction can be waived with the written consent of a majority of the investment banks selling the shares. The state is seen likely to offer a second tranche to a wider pool of investors early next year.

"We regard the government's timing as impeccable, and it appears credible to suggest that it could yet be out in full by the election," noted Investec Bank analyst Ian Gordon.

The national elections will take place in May 2015 and the coalition government had been eager to start the Lloyds selloff well before.

Chancellor of the Exchequer George Osborne called the sale "another step to repair what went so badly wrong in the economy" under the previous Labour government.

Bank of America Merrill Lynch, JPMorgan Cazenove Ltd. and UBS handled the placing. Charlie Foreman and William Rucker of Lazard and Slaughter and May advised on the placing.

Lloyds shares in early trading were down 1.56 pence at 75.80 pence.

--Written by Laura Board

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,903.16 +98.36 0.55%
S&P 500 2,070.19 -0.46 -0.02%
NASDAQ 4,764.6990 -0.6810 -0.01%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs