Lloyds investors to get proceeds from offer “rump”

Lloyds Banking Group said shareholders who do not take up its offer to buy up to 4 billion pounds ($6.1 billion) of shares will now receive any profit made from the sale of the shares.

The part-nationalised British bank, which on Sunday announced its Chairman Victor Blank will leave in the next year , has the largest shareholder base in Britain following its takeover of HBOS.

Its 2.8 million private investors are being offered 0.6213 shares at 38.43 pence apiece for each share owned.

Lloyds said in March it would offer shareholders the option to buy up to 4 billion pounds of shares, with the government buying any shares not taken. Investors not subscribing were not expected to have been compensated for the dilution.

But Lloyds shares have rallied in the last two months, closing on Friday at 89.2p, and now any shares not taken up in the offer will be sold in the market and any profit over 38.43p per share will be distributed to investors who did not take up their entitlement.

The government's stake is expected to remain at 43 percent.

The average qualifying private shareholder owns about 550 shares, so they will have the option to buy another 340 new shares for about 130 pounds.

The fundraising is to replace preference shares held by the government, reducing an annual cost of 480 million pounds and improving the bank's cashflow and capital position.