TSB’S flotation could value the bank at as much as £1.44bn when the price range is announced – which could come as soon as today.
The initial public offering (IPO) valuation is almost twice the £750m maximum offered by the Co-op Bank, which had previously tried to buy the 631 branches being sold by Lloyds Banking Group. And the £1.44bn is thought to be a cautious price on behalf of the investment banks working on the deal.
To reassure nervous equities markets, the advisors are pushing for a price of around 10 per cent below the bank’s £1.5bn to £1.6bn book valuation to show investors they have got a good deal.
As a result they hope the shares will bring in more money with each subsequent sale of the shares.
The full sale of the bank will be complete by the end of next year and is expected to take at least two more tranches of stock offerings.
Market commentator David Buik said there was huge retail interest in the deal, despite a glut of IPOs.
“We should hear confirmation, one way or another today, after a price meeting arranged by JPM and Citigroup,” he said.
TSB and Lloyds declined to comment.