Director Maximiti Limited
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Flogging off Lloyds - a good deal or a swizz ?

17th Sep 2013
Director Maximiti Limited
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Well then, a deal done late at night , and the first 6% is out of the door . Some people are grumbling about the paltry return but the remit was to save the economy and get back the initial outlay to the taxpayer . Make no mistake, the collapse of Lloyds would have screwed things up royally .

Anyway , the return was no worse than putting your money in the bank , which is exactly what the govenrment did .

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By MarionMorrison
18th Sep 2013 07:30

Good but not perfect

Placing the shares gets the advantage of putting more shares into the market and the very fact that the government has easily placed those shares at 75p means that they are probably going to open at 80-85p because the market will anticipate further rises.  People will then whinge and say "but you could have got 10% more for the shares if you'd waited".  But by placing 6% they will increase the value of what remains - 33%.  They will also increase public appetite for a major share sale to the public in 9-12 months time, pitching it as a response to public demand for the shares you missed out on last time.

My only grips is that they placed more than they needed to in order to soften the market up for a flotation down the line - 3-4% would have been perfectly adequate.  I can only assume that there is some significance in reducing the government shareholding below 33%.

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By Norman Younger
18th Sep 2013 10:13

Value of Lloyds

You are absolutely right. The trouble is trying to explain it to people who don't understand what drive share valuations. Perhaps the Daily Mail can assist us with a helpful headline .....

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