The Lloyds share price declined by more than 1% as investors continued to digest news that the company was planning to acquire Embark Group. The shares fell to 47p, 2% below yesterday’s high of 48p.
What happened: Lloyds Banking Group is one of the biggest banks in the United Kingdom. The bank owns other companies like Lloyds Bank, Halifax, Scottish Widows, and Bank of Scotland. Now it seems like the bank is in the process of adding another company to its group.
During the weekend, Sky reported that the bank was considering acquiring Embark Group for more than 400 million pounds. For starters, Embark is a company that was started by Phil Smith in 2013. It offers several products like pension and other retirement solutions. Further, it has more than 415k individual clients and more than 38.5 billion in management. It is backed by companies like Blackrock, FNZ, and Franklin Templeton.
If the deal closes, it will be the biggest acquisition by a British bank in recent times. The company could be attracted to the 38.5 billion in assets that the company owns.
Elsewhere, the government has sold another 5% of its holdings in NatWest, the bank that was formerly known as Royal Bank of Scotland. The government is still the bank’s biggest shareholder. This happened during the 2008 financial crisis when it paid $45.8 billion to rescue the company.
The four-hour chart shows that the LLOY share price has been in a strong upward trend in the past few months. Indeed, the shares are a few points below the important resistance level at 50p. The shares remains above the 25-day and 50-day exponential moving averages.
It is also below the ascending trendline that connects the highest swings since February 16. Therefore, in my view, the bullish trend will continue so long as the price is above the two moving averages. As I wrote a while ago, I believe that the shares will soar to 50p in the near term.
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