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Shareholder group urges investors to accept RBS' 2008 cash call settlement

An action group claiming recompense from Royal Bank of Scotland Group Plc over its 2008 rights issue is ready to settle, The (London) Times reported, citing a letter from the group.

The RBS Shareholders Action Group has called on its members to accept RBS' latest 82 pence per share offer to reach a settlement over the lender's ill-fated £12 billion rights issue. The bank was subsequently bailed out and investors suffered big losses.

The group, which consists of 9,000 private investors, said it had decided to accept the settlement, even though it was well below the 92 pence per share investors have been holding out for.

It said it considered a "number of practical and legal risks," one being the potential for RBS to appeal if the investors are successful in getting a higher settlement offer, thus increasing costs. This in turn would lead to a further trial to assess the level of damages, while offering no assurance that the final deal would match the original 82 pence offer.

The letter said a "substantial claimant" has decided to accept the offer and is no longer willing to fund the action, while various institutional shareholders have also accepted the deal.

Previously, a group of people from the action group had said they would rather see former RBS CEO Fred Goodwin held to account in court than opt for a settlement.

The case will return to the U.K. high court June 1, according to The Times, when the judge will hear if it is to proceed.