By Margot Patrick and Max Colchester
LONDON--The U.K. government on Tuesday said it is selling a 7.5%
stake currently worth around GBP4.23 billion ($6.99 billion) in
Lloyds Banking Group PLC in the latest step in the bank's return to
health.
UK Financial Investments Ltd., a part of the U.K. Treasury that
manages the stake, said it will place around 5.35 billion shares
with institutional investors, taking the government's stake down to
around 25% from 33% currently. The government cut what had been a
39% stake in September by selling a 6% stake in the bank for
GBP3.21 billion. Lloyds shares closed Tuesday at 79 pence, up
around one pence on the day.
The sale price for the shares will be set after gauging investor
interest Tuesday. The final price and other details of the placing
are expected to be announced early Wednesday. The stock sold in
September was placed at 75 pence a share, a 3% discount to its
trading place then, indicating a possible placing price of 76.6
pence for Tuesday's offer.
Bank of AmericaMerrill Lynch, J.P. Morgan Securities PLC, Morgan
Stanley Securities Limited and UBS Ltd have been appointed to act
as bookrunners in connection with the placing.
The latest share sale had been flagged by bankers as likely to
come by April, after Lloyds posted a surge in underlying profits
for 2013, and said it planned to resume dividends for the first
time since the financial crisis on its second-half earnings. An
offer to retail investors is likely to come around September,
people familiar with the matter have said.
Lloyds Banking Group Chief Executive António Horta-Osório said
he is pleased taxpayers will get more of their money back through
the sale.
"I believe this reflects the hard work undertaken over the last
three years to make Lloyds a safe and profitable bank that is
focused on helping Britain prosper," he said.
A Treasury spokesman said Chancellor George Osborne decided to
sell the shares after UKFI said it "would be appropriate."
"Building a stronger banking system is a core part of the
government's long term economic plan to deliver greater economic
security," the Treasury spokesman said.
Lloyds received GBP19.9 billion in state aid between 2008 and
2009 to withstand the financial crisis. Since then, it has sharply
cut its assets, pulled out of around 20 countries and restructured
its business to focus on retail banking and business lending within
the U.K.
The September share placing was a hit with investors. Bankers
working on that deal said the order book was covered in an hour and
that 10 orders came in for more than $250 million in shares.
Shortly after the new deal's announcement Tuesday, people working
on it said the order book was filling up and that some large global
investors had already registered their interest in recent months
about participating in this stage of the government selldown.
Razak Musah Baba contributed to this article.
Write to Margot Patrick at margot.patrick@wsj.com and Max
Colchester at max.colchester@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires