The government’s UK Financial Investments arm will sell 6% of the bank’s issued share capital, equivalent to 4.2bn shares, through an institutional share placing, it announced on Monday.
Bank of America Merrill Lynch, JPMorgan and UBS will manage the share sale.
A report in the Telegraph said an unnamed source close to the sale revealed that American institutional investors and hedge funds had registered high levels of interest and could buy as much as half of the 4.2bn shares on offer.
“That’s their bet on the UK economy,” the Telegraph quoted the source as saying.
Lloyds shares have risen 93% over the last 12 months to trade at 77.36p. Rumours of an imminent sale have helped push the shares higher in recent weeks.
The government will profit from the sale given today’s values, having paid an average price of 73.6p per share during the rescue in 2008.
Some £20bn of taxpayers’ cash was pumped into the failing bank during the financial crisis.
The share sale will take the government’s stake in Lloyds down to 32.7%.
Insiders had predicted the government would sell up to a quarter of its stake in the first placing. The disposal announced today is equivalent to a fifth of its holding.
