Lloyds Banking Group is all set to launch an initial public offering next week to divest almost 25% stake in TSB bank, which was floated as a separate entity during the second half of 2013.
It is believed that the TSB share sale will be for less than its book value and the bank might book a loss on the sale.
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The proposed divesture is part of Lloyds’ agreement with the European Commission (EC), whereby the bank had agreed to divest TSB, as a condition for receiving the £20bn taxpayer bailout during the 2008 financial crisis.
In November 2013, TSB CEO Paul Pester said that Lloyds could initially sell between 30% and 50% of its shares in the business, which has 631 branches and 4.5 million customers, as reported by Reuters.
One of the sources was quoted by Reuters as saying, "They’re being a bit more realistic on valuation. There’s just not appetite in the market."
"There’s just a rash of consumer-exposed IPOs, and TSB is very consumer-focused."
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