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The British government is selling more of its stake in Lloyds Banking Group (LON:LLOY) as part of a bid to fully privatise the bank in the coming months.
The finance ministry plans to launch a sale of at least £2bn of shares to retail investors at a 5% discount to the market price.
The government, which owned 39% of Lloyds after bailing it out in the 2008 financial crisis, still holds 11.98%.
The shares to be sold make up about 3.6% of the total equity of Lloyds, whose shares rose 0.82p to 77.37p in mid-afternoon trading in London.
Hargreaves Lansdown said the disposal would give smaller investors a chance at least to participate in a fraction of the sell-off.
The broker's head of equities, Richard Hunter, said: "With a projected dividend yield which could nudge 4% and interest rates remaining in the doldrums, you can see this being of interest to income seeking investors in the current environment.
"The market consensus of Lloyds is a buy could comfort those looking to pick up some shares.”
Investment director at AJ Bell, Russ Mould, said: "Ultimately investors should only buy the shares if they feel comfortable with the investment case for Lloyds.
"Growth is likely to be limited, as the UK is a mature and tightly regulated market, and cost-cutting can only take the bank so far.
"The bulk of any returns from the stock is therefore likely to come from its dividend yield and anyone looking to buy Lloyds needs to be confident that analyst forecasts for a payout of around 3.9p per share in 2016 – equivalent to a yield of 5.0% on the current share price – are both realistic and sustainable.” which was bailed out by the government in the 2008 financial crisis.
Ministers will be keen to avoid a repeat of the debacle surrounding the government's privatisation of postal service Royal Mail (LON:RMG).
Rises in the value of the shares after the disposal sparked criticism that ministers had sold it on the cheap.
People applying for investments of less than £1,000 in Lloyds will be prioritised, the Treasury said.
There will be a bonus share for every 10 shares for those who hold their investment for more than a year, capped at £200 per investor.
The Treasury said it would use the cash from the sale to pay off part of the national debt.
It also hinted that any major turbulence in financial markets could still delay or scupper the move, adding: "As always, share sales are dependent on market conditions."