TSB off to a flotation flyer as private investors like to say yes on high street
Saturday 21 June 2014
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.
- 1 Humans of New York image of crying gay teen receives best response from Ellen DeGeneres
- 2 What supermodels really think about posing in the nude
- 3 People all over the world are getting semicolon tattoos to draw attention to mental health
- 4 Black teen in critical condition after store employee 'shoots him for stealing 79-cent pack of cookies'
- 5 Chris Moyles reportedly set to make radio comeback with new breakfast show on XFM
Humans of New York image of crying gay teen receives best response from Ellen DeGeneres
Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
North Korean defector flees to Finland 'with evidence of chemical testing on humans'
Isis schoolgirl Amira Abase who fled London to join terrorists in Syria mocks victims of Tunisia massacre
Father faces deportation to Thailand after 27 years in Britain for two 'stupid crimes'
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...