The Royal Bank of Scotland plans to raise up to £2.5 billion ($US3.7 billion) from its stake sale in its US retail business, Citizens Financial.
RBS said in a regulatory statement that it will offer investors 135 million shares, or 25% of Citizens, at a public offering price per share of $US23.75. It initially intended to sell only 132.25 million shares.
It plans to reduce its ownership to below 50% of the company. With this offering, the RBS stake in Citizens stake will be reduced to 45.6%.
However, if there is a great amount of investor interest, RBS would be able to exercise an overallotment (a bigger sale) option and offer 229.5 million shares, and reduce its stake to 41.9%.
“The sale of Citizens is an integral part of the RBS capital plan. It will help us to create a stronger, safer, UK focused bank that can better serve the needs of its customers,” said
Ross McEwan, CEO at RBS in a statement. “This successful sale keeps RBS on track to meet our obligations and complete the divestment of Citizens by the end of 2016.”
Citizens is the 13th largest retail bank holding company in the US, with £89 billion ($US132.9 billion) in assets as of 31 December 2014.
In September last year, RBS launched the Citizens IPO. It originally planned to sell the shares at between $US23 and $US25. However, following a lukewarm market debut, RBS ended up selling shares for only $US21.50 each.
RBS needs the cash. Last year, it reported a £3.5 billion for the entire banking group.
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