Royal Bank of Scotland Group PLC took a big step toward reprivatization June 4 as the U.K. Treasury announced in a regulatory filing that it is offering institutional investors 925 million shares, or 7.7% of the company's total equity.
The results of the process, known as an accelerated bookbuild, will be revealed "in due course," although settlement and delivery of the shares is expected to take place June 7, according to the filing from UK Government Investments, the vehicle that holds the Treasury's stakes in private-sector companies. The Treasury said an update would be provided the morning of June 5.
The bank's shares closed June 4 at 281.1 pence apiece, implying a valuation of just above £2.59 billion for the deal. The government paid 502 pence per share to nationalize the bank in 2008.
The placing would reduce the government's stake in the bank to 62.4% from 70.1%, after which the state will sell no further shares for a period of at least 90 days. The government has said it intends to sell the equivalent of £15 billion in RBS shares by 2023.
CFO Ewen Stevenson is set to move to rival lender HSBC Holdings PLC, according to multiple media reports, following a legal settlement reached in May with the U.S. Department of Justice for $4.9 billion over crisis-era misconduct by the bank. Analysts had expressed doubts about the government's willingness to sell amid stock volatility driven by a political crisis in Italy and an incipient trade war between China, the EU and the U.S.
Citigroup Global Markets Ltd., Goldman Sachs International, J.P. Morgan Securities PLC and Morgan Stanley & Co. International PLC are acting as joint book runners on the placing. N M Rothschild & Sons Ltd. is serving as capital markets adviser, with Freshfields Bruckhaus Deringer LLP providing legal advice to UK Government Investments.
