TSB investors cash in as shares soar on stock market debut
Friday 20 June 2014
Thousands of private investors were £300 better off today after shares in TSB soared 12 per cent on their stock market debut.
Lloyds Banking Group, ordered to sell TSB by the EU after its £20 billion taxpayer bailout, priced the offer at 260p a share — bang in the middle of its revised range — and increased the number of shares it sold from 25 per cent of TSB to 35 per cent. A further 3.5 per cent is likely to be sold by JPMorgan on behalf of Lloyds.
TSB shares jumped to 299p — a gain of 39p or 15 per cent — which means that private investors who applied for £2000 worth of shares were £300 better off. Anyone who applied for £2000 worth of shares had their application satisfied in full and will get a bonus one-for-20 free shares if they hold them for 12 months.
The offer could have been sold 10 times over with 60,000 private investor applications who will end up with 30 per cent of the shares on offer.
Antonio Horta-Osorio, chief executive of Lloyds, said: “The significant investor demand for shares in TSB meant that we were able to set the offer size at 35 per cent.”
Paul Pester, chief executive of TSB, said: “I am delighted with the level of investor demand. It shows there is real appetite for a different kind of bank — a High Street bank, not a Wall Street bank — which is focused on customer service.”
Horta-Osorio, his finance chief George Culmer, chairman Lord Blackwell and deputy chairman Anita Frew met with senior management and advisers last night to set the price and size of the offer. Their feeling was they should take as much as they could now.
Assuming the 3.5 per cent extra sale goes ahead, Lloyds will be left with 61.5 per cent of TSB which could probably be sold by the December 2015 deadline in two tranches rather than the three which would have been needed to sell 75 per cent.
TSB’s success is also good news for the Government which plans to sell the bulk of its remaining 25 per cent stake in bailed-out Lloyds in the autumn including, for the first time, an offer to retail investors.
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