Lloyds Banking Group has reportedly narrowed the minimum price for the sale of 25% stake in TSB on the stock market, valuing the business at a minimum of £1.3bn.
People familiar with the matter were quoted by Reuters as saying that Lloyds’ bankers have revised the indicative price range for TSB shares to between 250 pence and 270 pence. Earlier the price range was set between 220 to pence 290 pence, valuing the business at a minimum of £1.1bn.
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The increase in minimum price for share sale will value the new bank to at least £1.3bn ($2.10bn) or 0.8 times its book, or net asset, value.
European regulators ordered Lloyds banking group to dispose of 631 branches of TSB as a condition to continue receiving the state aid during the financial crisis of 2008. Currently, Lloyds is 25% owned by the UK government.
According to TSB’s IPO prospectus, the bank had achieved only modest profits over the past three years, including an underlying profit of £172m in 2013, against £28m in 2012 and £57m in 2011.
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