Government to sell 6% Lloyds stake as privatisation begins

The government's UK Financial Investments arm will sell 6% of the bank's issued share capital, equivalent to 4.2bn shares, through an institutional share placing.

Bank of America Merrill Lynch, JPMorgan and UBS will manage the share sale.

Lloyds shares have risen 93% over the last 12 months to trade at 77.36p. Rumours of an imminent sale have helped push the shares higher in recent weeks.

The government will profit from the sale given today's values, having paid an average price of 73.6p per share during the rescue in 2008.

Some £20bn of taxpayers' cash was pumped into the failing bank during the financial crisis.

The share sale will take the government's stake in Lloyds down to 32.7%.

Insiders had predicted the government would sell up to a quarter of its stake in the first placing. The disposal announced today is equivalent to just 15% of its holding.

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