The sale of 25% of the business to private shareholders on the London Stock Exchange is set to take place in June and will be initially available to institutional investors and intermediaries, who will in turn facilitate distribution to retail clients.
The terms of the sale entitles each retail investor to receive one free share for every 20 purchased up to a total amount of £2,000, as long as they are continuously held for at least a year post IPO.
In 2008, Lloyds was bailed out by the UK government, along with a list of rivals, but the new European competition rules require a gradual withdrawal of state aid.
The bank, which is 25% government owned, must sell its remaining 75% stake in the TSB business by the end of 2015.
António Horta-Osório, group chief executive of Lloyds, said: “The decision to proceed with an initial public offering of TSB is an important further step for the group as we act to meet our commitments to the European Commission.
“TSB has a national network of branches, a strong balance sheet and significant economic protection against legacy issues. It is already operating on the UK high street and is proving to be a strong and effective challenger, further enhancing competition in the UK banking sector.”
