The U.K. government may start its sale of shares in Lloyds Banking Group Plc to individual investors in February, later than initially considered, according to a person with knowledge of the matter.
The Treasury’s decision to extend a program under which it sells stock to money managers through December makes it harder to offer stock to retail investors in September as had previously been discussed, said the person, who asked not to be identified because they weren’t authorized to speak publicly. The government has pledged to offer shares to individuals at a discount to the market price.
That leaves three dates open for the retail offering: after Lloyds reports annual earnings in February; after Chancellor of the Exchequer George Osborne’s budget the following month, or following Lloyds’s first-quarter results in May, the person said.
Prime Minister David Cameron made an election promise to sell discounted shares in Lloyds to the public in an offering that recalls the privatizations of Margaret Thatcher’s government in the 1980s. The Treasury said Monday it plans to start the process within the next 12 months.
The Treasury has been selling Lloyds shares in stages to money managers since December under a trading plan run by Morgan Stanley. The program has recouped about 3.5 billion pounds ($5.3 billion) for the government, bringing the total recovered from Lloyds to more than 10.5 billion pounds. The government’s stake in the bank has fallen to less than 19 percent.
“It looks like the drip program has been successful,” said Joseph Dickerson, an analyst at Jefferies International Ltd. who rates Lloyds a buy. “The shares have been less volatile than when exiting the stake through bulkier placings.”
Officials at UKFI and Lloyds declined to comment. The Treasury said it continues to look at all options for when to hold the offering.