Lloyds Share News (LLOY)

(Adds detail, analyst comment.) By Margot Patrick Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Lloyds Banking Group PLC (LYG) Monday said it will receive GBP332 million by selling a portfolio of private equity investments to a new joint venture in which it will hold a minority stake, as part of the 41%-state owned bank's plan to shrink its balance sheet by disposing of non-core assets. The bank's shares fell by 1 pence, or 1.2%, to 54 pence at 1140 GMT. The 40 company stakes, held through its Bank of Scotland Integrated Finance unit will be transferred to a venture called Cavendish Square Partners LP, 70%-owned by private equity investor Coller Capital. Lloyds will hold a 30% stake in Cavendish. Coller's cash consideration values the portfolio at GBP480 million, Lloyds said, a small premium to book value. The holdings include stakes in well-known U.K. brands such as Vue cinemas, fitness club chain David Lloyd and shirt retailer TM Lewin. The sale had been well flagged in the press and was expected to value the portfolio at around GBP500 million. Lloyds said the transaction wouldn't be material to its earnings. "Through this transaction, we are crystallizing value in these investments whilst retaining an interest in the investee companies with which we have had positive relationships for several years," said Truett Tate, group executive director of Lloyds' wholesale division. "This deal will ensure that we share in any future upside of our investments. We believe that the deal with Coller, a leading private equity investor, provides the investee companies with stability and support over the period ahead," he said. The current Lloyds management team will be retained in the venture. London-based Coller Capital, with about $8 billion under management in its funds, specializes in taking secondary stakes in private equity companies and portfolios from rival firms and other companies making private equity investments. Lloyds said the sale represents its sixth disposal in the past year, helping it to raise more than GBP750 million. The bank fell into part-state ownership after massive capital injections in 2008 and 2009. Analysts said the sale was in line with Lloyds' stated aim to sell non-core assets. Ian Gordon, analyst at Exane BNP Paribas, with an outperform rating, said the sale's small premium offers further confidence that loan impairments this year will be sharply lower than last year, which Lloyds' executives have previously said will be the case. Meanwhile, a Lloyds spokesman said he couldn't comment on speculation in the weekend press that the bank is considering selling Scottish Widows, its main insurance unit. -By Margot Patrick, Dow Jones Newswires; +44 (0)20 7842 9451; margot.patrick@dowjones.com (END) Dow Jones Newswires July 05, 2010 08:03 ET (12:03 GMT)