Lloyds sells TSB
After winning approval from European Union regulators on May 13 to scale back the amount of assets it has to sell. Britain’s biggest mortgage lender, will sell 25 percent of its TSB consumer bank in an initial public offering next month and offer bonus shares to retail investors.
The prospectus will be published in the middle of June, the London-based bank said in a statement today. Lloyds is required to sell its remaining stake in TSB, which has 4.5 million customers and over 600 branches, by the end of next year to satisfy regulators after its government bailout five years ago.
TSB Chief Executive Officer Paul Pester declined to comment on the potential valuation of the company, saying that was a question for Lloyds. The share sale comes amid a weak market that has seen Fat Face Group Ltd. scrap its IPO plans and Saga Plc price its offering at the bottom of a target range.
TSB “is already operating on the U.K. high street and is proving to be a strong and effective challenger,” Lloyds Chief Executive Officer Antonio Horta-Osorio said in the statement.
Pester, speaking to journalists on a conference call, said there was “strong appetite” for the IPO and predicted retail investors would buy 15 percent to 20 percent of the shares on offer. Retail investors will get one free share for every 20 they buy, up to a value of 2,000 pounds ($3,373), as long as they hold the shares for a year after the IPO.