More than 60,000 lead stampede for £2bn Lloyds sell-off stock

Shares worth at least £2 billion are to be sold directly to the public and more people have shown an interest in the sale in just one day than in the entire two-week registration for the Royal Mail issue two years ago.

The Treasury said that the government would sell the 12 per cent stake that remains of the 43 per cent of the bank that it took on at the height of the financial crisis in 2008 at a cost of £20.5bn to the UK taxpayer.

As part of the sell-off, a sale aimed at private investors will be launched next spring.

Members of the public will be offered a 5 per cent discount to Lloyds’ market price and small investors seeking shares worth less than £1,000 will get priority.

Those who keep their shares for at least 12 months will get one bonus share for every 10 they own.

The value of the bonus share incentive will be capped at £200 per investor.

In preperation for next year’s sale, applications have been made available online and can be submitted by post.

The UK Government is expected to drum up even more interest in the shares with an advertising campaign expected to echo the famous ‘Tell Sid’ commercials for British Gas during Margaret Thatcher’s privatisations in the 1980s.

The Treasury said members of the Armed Forces and their spouses stationed overseas would also be able to take advantage of the offer.

Speaking at the Conservative Party conference in Manchester, Mr Osborne gave a nod to Lady Thatcher, who often spoke of her dream of creating a shareholder democracy.

“We will help to create that shareholder democracy in this country,” the Chancellor said. “We have announced a big sell-off of Lloyds shares to members of the public, small investors, people who are going to have a chance to get something back having put all that money in under the last government.

“We’ve made a lot of progress with Lloyds, but this final chunk, this final sale, will be the biggest privatisation in 20 years. I don’t want those shares to go to City institutions. I want them to go to members of the public.”

It is the largest such sale since John Major’s government disposed of its remaining stake in BT in 1993.

Reacting to the news of the sell-off yesterday, Laith Khalaf, senior analyst at Hargreaves Lansdowns, said: “Wild horses couldn’t drag investors away from this share sale, especially given the discounted price and the dividend stream Lloyds is expected to start churning out”.