TSB off to a flotation flyer as private investors like to say yes on high street

 

Shares in TSB soared nearly 12 per cent on their stock market debut yesterday, netting several hundred pounds profit for the private investors who piled in to the float.

Lloyds Banking Group, which was ordered to sell TSB by the European Commission following its £20bn taxpayer bailout, priced the offer at 260p a share – the middle of its revised range – yesterday morning and increased the number of shares on sale from 25 per cent of TSB to 35 per cent. A further 3.5 per cent “overallotment” was also exercised, taking the total stake sold to 38.5 per cent.

TSB shares rose 30p to 290p, which means that private investors who applied for £2,000 worth of shares were £231 better off. Investors in this bracket had their application satisfied in full.

The offer could have been sold 10 times over, with 60,000 applications from private investors, who will end up with  30 per cent of the shares on offer. Those who hang on to the shares for 12 months will receive a free bonus share of one for every 20 held. However, anyone who applied for more than £2,000 of shares had their applications scaled back, with those seeking £10,000 worth getting just over £4,300.

Antonio Horta-Osorio, the chief executive of Lloyds, said: “The significant investor demand for shares in TSB, which reflects investors’ confidence in the prospects for the business, has meant that we have been able to set the offer size at 35 per cent. TSB has a national network of branches, a strong capital base, robust liquidity and significant economic protection against legacy issues.”

Mr Horta-Osorio, his finance director George Culmer, the chairman Lord Blackwell and deputy chairman Anita Frew met senior management and advisers on Thursday night to set the price and size of the offer. Their feeling was that with strong late demand for shares, they should take as much as they could immediately.

Even though the bank is unlikely to pay any dividends until 2018, demand for TSB shares rose sharply in the last few days before the float, driven partly by increasingly hawkish statements from the Bank of England on future interest rate rises. 

Paul Pester, TSB’s chief executive, said: “I am delighted with the level of investor demand for TSB’s shares. 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. We are now focused on bringing more competition to high street banking across Britain.”

Lloyds will be left with  61.5 per cent of TSB, which could probably be sold by the December 2015 deadline in two tranches.

The success of the TSB sale is also good for the Government, which plans to sell the bulk of its remaining 25 per cent stake in Lloyds in the autumn – including, for the first time, an offer to retail investors.

Not everyone’s happy: Debut disappointment

Euronext suffered a soggy start to life as a listed company as shares fell 2 per cent on the financial market operator’s debut. The float of the European exchange was priced at €20 by its parent company Intercontinental Exchange, but it ended its first day trading at €19.60. Meanwhile, in London, the intellectual property specialist Allied Minds ended its first day trading flat at 190p. The Boston-based firm, founded by British financier Mark Pritchard, backs businesses spun out of US universities and government departments, including the  US Department of Defence.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Life and Style
Suited and booted in the Lanvin show at the Paris menswear collections
fashionParis Fashion Week
Arts and Entertainment
Kara Tointon and Jeremy Piven star in Mr Selfridge
tvActress Kara Tointon on what to expect from Series 3
Voices
Winston Churchill, then prime minister, outside No 10 in June 1943
voicesA C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
News
i100
News
An asteroid is set to pass so close to Earth it will be visible with binoculars
news
Arts and Entertainment
Benedict Cumberbatch has spoken about the lack of opportunities for black British actors in the UK
film
News
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Recruitment Genius: Outbound Sales Executive - OTE £25,000

£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Java Developer / J2EE Developer - Watford - £45,000 - £47,000

£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...

Ashdown Group: Marketing Product Manager - (Financial Services) - SW London

£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Day In a Page

Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project