In order to attract investors ahead of the launch of initial public offering (IPO) of its banking subsidiary TSB on 27 May 2014, Lloyds Banking Group is reportedly planning to give free loyalty shares for retail investors.
TSB will offer one bonus share for every 20 to its retail shareholders who will hold their stock for at least one year, as reported by Sky News.
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The British banking group aims to garner nearly £1.5bn by divesting up to 25% stake of TSB during the IPO, of which 15% to 30% isexpected to be offered to retail investors.
It is believed that the TSB stake sale will be for less than its book value and the bank might book a loss on the sale.
TSB CEO Paul Pester said that Lloyds could initially offload between 30% and 50% of its shares in the business in November 2013.
Lloyds, which is 25% taxpayer owned, had agreed to offload its 631 TSB bank branches to meet requirements set by the European commission at the time of its government bailout.
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By GlobalDataFurther, the bank is planning to dispose of remaining equity stake of TSB by the end of next year to comply with European Commission requirements.
