* UKFI to sell a further 7.5 percent of government's stake
* Sale will reduce government's holding to 25 percent (Adds further details)
By Matt Scuffham
LONDON, March 25 (Reuters) - Britain will sell an additional7.5 percent of part-nationalised Lloyds Banking Group,worth about 4.2 billion pounds ($6.9 billion), via a placing toinstitutional investors, UK Financial Investments (UKFI) said onTuesday.
UKFI, which manages the government's stakes in Lloyds andRoyal Bank of Scotland, said the sale would cut thegovernment's stake in Lloyds to 25 percent.
The government sold a six percent stake in Lloyds inSeptember at a price of 75 pence per share, a milestone in thecountry's recovery from the 2008 financial crisis, during whichtaxpayers pumped a combined 66 billion pounds into Lloyds andRBS.
The size of the latest sale is in line with marketexpectations and the price is expected to be above the 73.6pence which the government paid for the shares.
UKFI is expected to sell more shares later in the year in anoffer which will include private retail investors.
Britain's finance ministry said on Tuesday that its priorityfrom the sale was "getting the best value for the taxpayer,maximising support for the economy and restoring privateownership".
"The government will only conclude a sale if theseobjectives are met," a spokesman for the Treasury said.
Shares in Lloyds closed at 79.11 pence on Tuesday.
Bank of America, Merrill Lynch, JP Morgan, Morgan Stanleyand UBS have been appointed to act as bookrunners.
($1 = 0.6059 British Pounds) (Reporting by Matt Scuffham; Editing by Steve Slater and AnjuliDavies)