First sale of government stake in Lloyds is a success

But can private investors cash in on the deal?

Just a few days ago the government formally announced the imminent stock market flotation of state-owned British postal stalwart Royal Mail, as discussed by Spear’s last week.

In a move reminiscent of the mass privatisation of the Thatcherite era, this week the sale of another major organisation – albeit only part-owned by the state – has begun. Earlier this morning it was announced that the initial sale of taxpayer-owned shares in Lloyds Banking Group to institutional investors has raised £3.2 billion for the Treasury, representing a small profit (but not after inflation).

However, unlike the case of Royal Mail’s whopping 378-year-long history of complete state ownership, the government has only owned just over a third (38.7 per cent) of Lloyds Banking Group for the past five years, following its £20bn bailout of the failing bank in 2008 as a result of the Lloyds’ disastrous acquisition of Halifax Bank of Scotland.

The government is selling a 6 per cent share of it stake, reducing its ownership of the bank to around 32.7 per cent. While this may appear to be a small chunk of its holding, the Coalition can hope to cash £3.3 bn for the benefit of taxpayers on breaking the deal.

In a statement the Treasury said: "We want to get the best value for the taxpayer, maximise support for the economy and restore them to private ownership. The Government will only conclude a sale if these objectives are met."

Shares in Lloyds closed at 77.36p on Monday, which is well above the price of 61p that Chancellor George Osborne regards as the break-even level. During Lloyds' bailout the government bought shares at an average price of 73.6p.

Since the average market price at the time was 61p, the government booked the difference as a loss and added it to the national debt. BBC business editor Robert Peston says that based on Monday's share price the taxpayer should "more-or-less" get its money back.

The sale of this banking giant, laid low by the credit crunch, has been hailed as the UK’s second biggest share placing ever. It is, according to the Financial Times, not only a milestone in Lloyds’ recovery but also the sign of a momentous turnaround in the UK’s fortunes in the wake of the financial crisis, which brought the banking industry to the brink of collapse in October 2008.

The FT also reports that Lloyds’ shares, which are expected to be sold at 75p, have soared more than 90 per cent in the past 12 months, racing past the government’s 73.6p "in-price" for the first time in three years last month. It came as no surprise, therefore, that the government set the wheels in motion for the reprivatisation process.

And, naturally, investors are keen to muscle in on the action. The Capital markets bankers involved in the transaction reported a swift take-up of Lloyds shares, with one US hedge fund said to have submitted a $1bn order.

"Investors are making a call on the UK," said one banker on the deal. 'This level of demand would not be there if people weren’t confident in the UK’s broader economic recovery.'

The good news is that individual investors could also soon get their hands on some Lloyds shares, since the initial placement is expected to be followed by a second sale – potentially involving retail investors – in the first half of 2014.

Royal Mail’s flotation has created some interesting private investment opportunities through publicly traded shares, so let’s hope we can bank on getting access to some Lloyds stocks, too.

This piece first appeared on Spear's Magazine.

Lloyds TSB. Photograph: Getty Images

This is a story from the team at Spears magazine.

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Young people want big ideas – that's why I refuse to dumb down Radio 4

My week, from finding a way through the fog to getting the quarterly audience figures.

I walk to work through Regent’s Park, when possible accompanied by my dogs, which my husband then collects on his bike ride and takes home. If there is time we have coffee together in the small hut just before the inner circle. This is a good way to listen to the Today programme, I find, as I can keep one ear in, achieve a rational, critical detachment and still enjoy the birds, and then add the other ear if a strong interview demands immersion, or take both out altogether when despair creeps up. On the subject of Today, I hope to have some fun with Sarah Sands, whom we have just appointed as the programme’s new editor; it’s good to see an experienced woman brought in at a senior level to the BBC.

 

A winter’s tale

The park through the seasons has become something of an addiction, measured out by inspired planting of appropriate annuals, the names of which I note and discuss with the gardeners when I dare interrupt them.

Memorable events occur quite frequently during this walk: I once stumbled upon a proposal of marriage involving a beautiful young woman who once had worked for me; an elderly Chinese gentleman practises t’ai chi regularly at a certain spot and I imagine talking to him about the changes he has seen in his lifetime back home. I have seen a rare green woodpecker on the grass pecking boldly in plain sight, and hopeless ducks, silent, puffed up, marooned in the fountains, unable to find their way back to the ponds, so close by.

At the start of winter, while walking home one day, I got stuck in the park, with a group of other stragglers, as the gates locked with the onset of darkness. Rather than retreating the way I had come, I accepted the offer (from a rather good-looking stranger) of a lift down from the top of the gate. The atmosphere then was alive, exhilarating, with crowds heading for the Frieze Masters marquee. How different it all is now, in 2017. There’s a new mood, a new American president, a new era.

 

Musical interlude

Recently, Roger Vignoles – the glorious pianist and a close friend – was playing, as he often does, in a lunchtime concert recorded for Radio 3 around the corner from Broadcasting House at the Wigmore Hall, with the baritone Roddy Williams. French songs: Fauré, Poulenc, Honegger, with a handful from Caplet (the latter quite new to me). All thoughts of politics fled, giving way to “L’adieu en barque”, set late one summer’s day on the river, a moment to clear the fog, both within and enveloping us that day in London.

I left an hour later in clear sunshine, feeling smug because we have commissioned Roddy’s Choral ­History of Britain for Radio 4 later this year.

 

Power trip

Waiting for coffee to brew, I was discussing Book of the Week with Gill Carter, commissioning assistant on this slot, when my drama commissioner, Jeremy Howe, put his head round the door. “Clarke Peters (yes, the one from The Wire) is here reading The Underground Railroad for Book at Bedtime.” Assured, deep tones rang out from a tiny studio on the third floor. “I have to keep stopping,” he said, as I thanked him.

Who could not be overcome by this story of slavery and bravery at this moment in American history? I am so glad to bring it to listeners this month. “Can you help?” the producer pleaded as we left. “We’re about to be thrown out of the studio.” That’s real power, I thought, as ten minutes later Jeremy had conjured up the extra time.

Clarke Peters will be back in the autumn with a series about the real history of black music in the UK which, he says, is little understood.

 

Culture and anarchy

This is the time of year when we launch the commissioning round calling for big ideas for next year. It’s a humbling thing to stand in our beloved art-deco Radio Theatre in front of hundreds of programme-makers, hoping that they will be inspired to bring “the best which has been thought and said in the world” (my guiding principle from Matthew Arnold).

I try on these occasions to lay out a little of how I see the shape of the world in the commissioning period ahead. This year the Loneliness of the Long-Distance Runner overcame me. Better perhaps simply to outline the way we commissioned the first week of 2017 to catch the mood. T S Eliot, more or less all New Year’s Day, read by the formidable Jeremy Irons, raised an echo of the Thirties, then a factual series of considerable documentaries across the week described The New World, followed by writers around the globe Imagining the New Truth.

Finally, inspired by Twelfth Night and the spirit of misrule, the comedy writer John Finnemore, one of our favourites, took over as the Lord of Misrule himself.

The imaginative world and writers have never been more needed. Whether it is truth or post-truth, I suspect that dramatic, imagined and creative truth when properly achieved is probably the nearest we can ever get to truth itself.

 

Tuning in

It’s the week of Rajar. These are quarterly audience figures for radio. In the past few months, they tell us, over 11 million people have listened each week to BBC Radio 4, setting new records. Just under half are below our average age of 56 and 1.5 million are under 35. At the moment we seem to have over two million weekly visitors to the website and roughly 20 million monthly global downloads.

Who says young people don’t want intelligent content? Who says that dumbing down is the only way to attract big audiences? We at Radio 4 try to be all about smartening up. We mark Rajar Day (whether the numbers are up or down) with cake, so I make my way to Paul for two tarts, pear and blueberry this time.

Gwyneth Williams is the controller of BBC Radio 4

This article first appeared in the 16 February 2017 issue of the New Statesman, The New Times