Lloyds stake to receive bid from group led by Mervyn Davies

8th Jul 2013 11:38

Former Standard Chartered Chairman Mervyn Davies plans to form a consortium of investors to bid for part of the UK government's 39 per cent stake in Lloyds Banking Group, according to reports on Monday.Davies has approached Standard Life and sovereign wealth funds about assembling a group to make an offer for the interest in the lender, Bloomberg said, citing a person familiar with the situation.The group, which is expected to apply for a 10% stake, is yet to reach a deal with the government which is weighing up its options to make sure they receive the best return on investment. UK Financial Investments, which oversees the government's stakes in Lloyds and Royal Bank of Scotland Group (RBS), last month invited banks to apply to manage the sale of the interests and firms have until Monday to submit their offers. Lloyds' shares were up 2.71% to 66.38p at 11:48 following the news. They currently exceed the 61p level at which the government says it will break-even on its holding after providing a £20bn taxpayer bailout five years ago.Davies, who has been working with private equity firm Corsair Capital, and his consortium are said to be prepared to offer more than the government's break-even price.Lloyds and Corsair Capital both declined to comment on the reports. The news comes after Chancellor George Osborne said the government was "actively considering" selling shares in Lloyds. However, RBS's return to the private sector has a while to go due to an abundance of bad assets, he said at London's Mansion House last month.RD