Newspaper article The Evening Standard (London, England)

UBS Warburg Quick to Cash in on Lloyds TSB

Newspaper article The Evening Standard (London, England)

UBS Warburg Quick to Cash in on Lloyds TSB

Article excerpt

Byline: MICHAEL CLARK

IT has been a profitable morning's work for the Swiss broker UBS Warburg after it took a lucrative turn in a big placing of shares in high street bank Lloyds TSB.

Warburg bought the 6.56 million shares, worth almost [pound]50 million, from one big institutional shareholder at a heavily discounted 703p. It placed them with other institutional clients at 708p, netting a profit on the deal of [pound]328,000 before expenses. It was all completed in less than half an hour.

Not bad work if you can get it.

The Lloyds share price responded with a fall of 381/2p, or 5%, to 717p making it the biggest faller among the top 100 companies.

The placing coincided with a fall in the price of rival high street bank HBOS of 26p to 779p after announcing plans to raise [pound]1.37 billion by the issue of an extra 150 million shares. The group, the subject of a recent merger between Halifax and Bank of Scotland, was forced to bring forward its annual results by three days in order to allow broker Cazenove time to complete the bookbuilding exercise for the placing.

It was Cazenove that, along with rival broker Hoare Govett, recently completed the [pound]420 million Centrica placing in double quick time. The City liked Centrica's proposed acquisition programme and was willing to back it.

That is why the shares were placed so easily. It will be interesting to see if investors have the same appetite for HBOS's organic expansion plans in the face of intense competition from the other retail banks. The news from HBOS took a heavy toll on the other retail banks with Barclays falling 34p to 2110p, Standard Chartered 14p to 717p and Alliance & Leicester 41/2p to 845p.

The fall in the banks came against the backdrop of a rising market. Fresh pressure on the bears forced prices higher in thin trading and enabled investors to discount the setback for the Dow last night in the wake of some disappointing consumer confidence numbers. …

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