Lloyds Said to Plan $980 Million Sale of Builder Keepmoat

Residential Property under Construction by Keepmoat
Residential property is seen under construction by Keepmoat Homes Ltd., in Middlesbrough. Photographer: Matthew Lloyd/Bloomberg

Lloyds Banking Group Plc is preparing to sell its stake in Keepmoat Ltd. in a deal that may value the U.K. homebuilder at about 600 million pounds ($980 million), said two people with knowledge of the matter.

Lloyds, Britain’s largest mortgage lender, may sell its holding in the Doncaster, England-based company as soon as the first half of 2014, said the people, who asked not to be identified because the talks are private. Keepmoat’s shareholders are seeking offers from private equity firms, the people said.

Keepmoat, which also refurbishes social housing, was first purchased by HBOS Plc’s private-equity unit in 2007 for about 783 million pounds. Lloyds, which acquired HBOS during the financial crisis, later sold Keepmoat to Caird Capital, a firm started by the former heads of HBOS’s private equity operation.

Caird then merged Keepmoat with Apollo, another homebuilder, before Lloyds again took a stake in October 2012 as part of a debt-for-equity swap, two of the people said.

The bank has been reducing its holdings in property developers over the past year, selling stakes in McCarthy & Stone Ltd. and Avant Homes as the U.K. housing market recovers.

Spokesmen and officials for Keepmoat, Lloyds and Caird either declined to comment or didn’t respond to e-mail and telephone requests seeking comment.