Fund Firm’s Boycott Threatens Lloyds Stock Sale
Investors are brewing resentment after Britain's government tried to clear a path for the politically sensitive sale of its 39% stake in Lloyds Bank. Some fund managers said that they are cautious to buy staggered sale stocks until banks and regulators clarify rulings. The said rulings refer to the time frame that would allow company owners to sell more shares. The dispute was deemed to hurt big stock offer such as Lloyds.
Investors said that they have burned before by banks that allowed owners to bypass lock-up agreements. These agreements are supposed to prevent too much stock hitting market and pushing the shares to decrease in value.
Britain saw the sale of its stake in Lloyds Banking Group as a way to improve its national finances. The government would also get more banks to lend more to businesses once the sale is pushed through. However, any boycott from the funds would mean complication for the privatization of Lloyds Banking Group.
The debate was prompted by a deal last May. This was when Lloyds sold 15% of wealth manager St. Jame's Place. The transaction was placed just after 10 weeks following a previous sale despite its agreement not to decrease its stake further for at least one year. The lockup was waved by book runners Bank of America Merrill Lynch. Lloyds and BofA Merrill Lynch refused to give statements regarding said report.