Lloyds plans to sell stake in about 60 companies

25 May 2009

Lloyds banking group is planning to auction its stake in about 60 companies, a majority of them being UK's best-known corporations, which it acquired through its controversial Halifax Bank of Scotland (HBOS) acquisition last year.

Lloyds banking group had acquired UK's largest mortgage lender HBOS for £12.2 billion in September, which materialised only after British Prime Minister Gordon Brown assured Lloyds Chairman cictor Blank that competition watchdogs wouldn't derail the deal. (See: Lloyds takes over HBOS in $21.7 billion deal with British PM Brown's support).

The acquisition of HBOS also bought for Lloyds more than 60 companies, such as cinema chain Vue Entertainment, D&D Restaurants, which owns some of London's best-known restaurants, McCarthy & Stone-the retirement home builder, house builder Crest Nicholson, pipe maker Polypipe, the yacht builder Sunseeker, shirt company TM Lewin, newsoaoer distributor  RS McColl, health and fitness group David Lloyd Leisure, among others.

Lloyds, is reported to have appointed Swiss investment bank UBS to assess the value of the stakes, which have declined dramatically since the beginning of the recession in the UK.

Analysts feel that that Lloyds, which had acquired HBOS's stakes in the various companies at the top of the market price of about £1.4 billion in September, have declined in value by approximately £600- £700 million, and by selling it now, the banker would probably get even less.

The British government, which had infused £17 billion into Lloyds following its rescue takeover of the stricken HBOS, for a 43-per cent stake, had entered into a deal with the bank to raise the government's holding to 65 per cent, that would further rise to 77 per cent if the bank's 'B' shares were to be converted. (See: UK government ups stake in Lloyds bank to 77 per cent)