LONDON, June 19 (Reuters) - Lloyds Banking Group isconsidering selling a 35 percent stake in TSB when it spins offand lists the new bank on Friday, more than the 25 percent stakeplanned, people familiar with the matter said.
Lloyds, which is being forced to sell TSB by Europeanregulators, will make a decision later on Thursday, but hassignalled to investors it may take up an option to "upsize", thesources said.
Shares are expected to be sold at at least 260 pence a shareafter decent demand, which is the mid-point of the revised250-270p price range set on Tuesday, the sources said. Thatwould value TSB at about 1.3 billion pounds, or about 0.8 timesits book value.
Lloyds said in its prospectus it planned to sell 125 millionshares in TSB, or a 25 percent stake. But it said if there wasstrong demand the offer size could be increased to 175 millionshares, or 35 percent. (Reporting by Steve Slater, Matt Scuffham and Vikram Sudhedar)