Lloyds Banking Group is expected to price its much awaited initial public offering (IPO) of TSB shares to divest nearly 25% stake at below its book value.
Industry people familiar with the development were quoted by media sources that TSB is likely to be valued at nearly £1.4bn, below its book value of over £1.5bn.
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Lloyds, which is 25% owned by the UK government, had agreed with the European competition regulators to divest 631 branches of TSB as a condition to secure bailout package during the financial crisis of 2008. The banking group had promised to sell the whole of TSB by the end of 2015.
It is believed that Lloyds will offload TSB in three or four parts over the next 18 months to attract maximum investors.
Earlier a deal to divest TSB to the Co-operative bank collapsed in April 2013, which was estimated at £750m.
TSB already serves 4.5 million customers and manages 6% bank branches in the country, thereby emerging as the Britain’s seventh-largest retail bank.
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