Lloyds Banking Group Agrees to Sell Its Stake in Crest Nicholson to U.S. Investment Company Varde

The Lloyds Banking Group reported Friday that it had agreed on a deal that will see it sell its controlling stake in Crest Nicholson to Varde, a US based firm.

[UKPRwire, Mon Sep 13 2010] The Lloyds Banking Group reported Friday that it had agreed on a deal that will see it sell its controlling stake in Crest Nicholson to Varde, a US based firm. The London Listed Lloyds Banking Group undertakes the Crest Nicholson stake sell as part of its ongoing non-core assets disposal. The overall aim of the non-core assets disposal is geared at enabling the Banking Group refocus on its core lending operations.

The reports over the deal reiterated that the US based firm will be buying Lloyds’’ stake in Crest Nicholson, adding that the bank plans to make a write back on its previous valuation of the stake. Lloyds Banking Group is the UK’s largest retail bank and was partly nationalized during the credit crisis. However, the bank would not comment or disclose the value of the sale; but even so, the Financial Times reported that the deal was priced at $232.1 million, about 150 million pounds.

The Crest Nicholson stake sell comes amidst the recent sale of the Banking Group’s private equity business to Coller Capital for an estimated 332 million pounds, and the sale of its assets in its Ecuador unit for an estimated $25 million. The move to dispose off its non-core assets follows massive losses the firm made after it acquired troubled rival HBOS during the 2008 global financial meltdown. The acquisition was undertaken in an emergency deal, aided by the then Labor government.

Subsequently, the Lloyds Banking Group’s troubles forced the UK government to take a 41% stake interest after the bank had accrued bad loans, forcing the bailout. From the bailout deal, Lloyds was forced by regulators to sell hundreds of its branches. The latest non-core asset sale will see US based Verde takeover Lloyds’ stake in the housebuilder, Crest Nicholson. With the announcement of the stake sell, Lloyds’ shares went up by 2.7%, making the firm one of the foremost gainers on Britain’s benchmark FTSE 100 index. At the same time, Barclays Capital increased its recommendations on Lloyds’ shares to “equal –weight” from “underweight,” with traders reportedly welcoming the Crest Nicholson stake sale. The US firm, Varde was advised on the investment by Lazard, an American investment bank.

Lloyds TSB Group plc was renamed Lloyds Banking Group plc on 19th January 2009, following the acquisition of HBOS plc. This subsequently made it the largest retail bank in the UK with a number of leading market positions.

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