CompaniesMay 23 2013

Further SJP sale nets £450m as Lloyds breaks ‘lock-up’

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ByDonia O’Loughlin

Lloyds Banking Group has put a further 77m of its shares in advisory firm St James’s Place up for sale in a placing that should net approximately £450m, breaking a pledge to maintain its reduced shareholding after the bank realised around £400m a share sale in March.

Each share has been valued at £5.80 and settlement of the placing will take place on 29 May 2013. On completion, Lloyds will hold 110m million SJP shares, approximately 21 per cent of the company’s issued share capital.

As a result of the placing, the group will realise a gain on sale of approximately £40m. The group said the placing will increase the group’s core tier 1 capital by approximately £40m, equivalent to an approximate 1 basis point benefit to its core tier 1 capital ratio under current capital rules.

The latest announcement follows the sale by Lloyds in March of 102m of its shares in advisory firm SJP, which saw it make a net gain of £394m. At the time, Lloyds said that it had entered a lock-up agreement that would see it maintain its then 37 per cent shareholding for at least a year.

Lloyds has said that after the latest sale it will be bound by the existing lock-up agreement and that it’s remaining shareholding will be maintained for a year. It said that the renewed agreement cannot be waived for at least 180 days from the date of completion.

David Bellamy, chief executive of SJP, said in a statement following the March announcement that “increased liquidity” alongside “a broader shareholder base” would be beneficial both to the business and shareholders.

Earlier this month, Lloyds posted a £1.5bn profit before tax for the first three months of this year, which it attributed in part to the sale of SJP shares which raised £394m, as well as continued improvements in cost efficiency.

A statement from Lloyds on the London Stock Exchange said: “Following the placing the group expects to continue to account for St James’s Place as an associate, reflecting the group’s share of the company’s profit within its income statement.

“The statutory profit after tax but before minority interest attributable to St James’s Place in the group’s accounts for the year ending 31 December 2012 was £76m.”