LONDON: Lloyds Banking Group could launch a second sale of shares in TSB Banking Group in the next week after a lock-up period expires at Tuesday's stock market close, according to banking sources.
Investment banks have been making informal pitches to Lloyds for a mandate to sell the shares, and with TSB about to enter a "closed" period ahead of its Oct. 24 third-quarter results, the offer could come as soon as this week, one source said, cautioning that there was no certainty of the timing of a sale.
Lloyds in June sold a 38.5 percent stake in TSB, Britain's seventh-largest lender, at 260 pence per share, valuing the business at 1.3 billion pounds ($2.1 billion). The offering was 11 times oversubscribed by investors.
Lloyds, which is expected to sell the remaining shares in two further tranches, agreed not to sell any more shares for 90 days following the first sale. The expiry of that lock-up leaves it with a short window beginning on Wednesday in which it can sell the shares ahead of the pre-results closed period.
The shares have performed well since their debut and are trading at 277.4 pence, 7 percent ahead of the price of the IPO, making a sale of about half of the remaining shares feasible, the sources said.
Lloyds and its advisors had not wanted a sale of TSB shares to clash with a further sale of the government's remaining shares in Lloyds itself.
However, shares in Lloyds are trading below the price of the government's last sale in March, ruling out a further sale this month and clearing the way for Lloyds to sell down its stake in TSB.
Lloyds must sell its entire stake in TSB by the end of 2015 as a condition of its 20 billion pound government bailout during the financial crisis.
Any sale will be dependent on stock market conditions, the sources said, and the bank remains confident it will still meet the deadline even if a second sale doesn't happen this month.
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