Lloyds prices TSB below market value
Britain's Lloyds Banking Group has priced the stock market listing of its TSB business at below book value, aiming to attract investors and make progress on a much-delayed, costly sale.
Lloyds, 25pc owned by the UK government, is obliged by European regulators to sell the 631 branches which now form TSB as a condition for their approval of state aid received by the bank during the financial crisis five years ago.
Banking industry sources expect Lloyds to sell TSB in three or four tranches.
The initial price reflects a cooling of investor interest in UK flotations after a rush of activity earlier in 2014. "I am feeling these IPOs are starting to grow weary on investors. Bearing in mind Lloyds need to make the disposal as they are obliged, it may be just a case of them making sure it is fully subscribed to," said Ed Woolfitt, head of sales at stockbroker Galvan.
Lloyds said the shares would be sold at between 220 pence and 290 pence each, valuing TSB at between 0.7 and 0.9 times its book – or net asset – value of €1.6bn (€2bn).
It is hoping to attract investors looking for exposure to Britain's economic recovery from a bank which is untainted by scandals that have dogged the industry since the financial crisis. Final pricing will be announced on June 20, with initial dealings starting on the same day. (Reuters)