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UK sells 7.7% stake in RBS for £2.5B

The U.K. government completed the placement of 925 million shares or a 7.7% stake in Royal Bank of Scotland Group PLC for 271 pence each, for expected proceeds of about £2.51 billion.

The placement, which was done through an accelerated book build, trimmed Britain's shareholding in RBS to 7,509,483,519 ordinary shares, or about 62.4% of the bank's ordinary share capital, from 8,434,483,519 ordinary shares or about 70.1%. Settlement of the placing will take place June 7.

The government paid 502 pence per share to nationalize the bank in 2008, implying a loss from the sale of about £2.14 billion. U.K. Chancellor Philip Hammond said the proceeds will be used to reduce Britain's national debt.

Citigroup Global Markets Ltd., Goldman Sachs International, J.P. Morgan Securities PLC and Morgan Stanley & Co. International PLC served as joint book runners on the placing. UK Government Investments Ltd. — which manages the government's stake in RBS — and the U.K. Treasury have agreed with the book runners that they will not sell any more shares in RBS for a 90-calendar-day period after placement completion without prior written consent of the book runners.

N M Rothschild & Sons Ltd. acted as capital markets adviser, while Freshfields Bruckhaus Deringer LLP acted as legal counsel to UKGI in respect of English and U.S. law.