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The Royal Bank of Scotland – Open offer

relentless1892
Posts: 1 Newbie
Hello,
I invested in RBS shares some weeks ago, when there downward fall began to take place, as an investment for the future, well today, I have received the below email from my online trading account, I'm not quite sure what exactly it's asking me to do, or not to do....can anyone help? What exactly are my options here? I have put x's in place of my actual share qty and values.
Dear Investor
The Royal Bank of Scotland – Open offer
Your holding now: x
The Company has announced proposals to shareholders to subscribe for 18 new ordinary share for every 13 existing shares held as at 10th November 2008 at a price of 65.5p per new share.
On your above-mentioned holding, your entitlement is any number up to x new shares at a cost of £x, plus a £10 handling charge. There is an excess application facility with this offer.
If you wish to take up some or all of your entitlement, please let us have your instructions by return of email no later than 19th November 2008 (9am) ensuring that the funds are available on your portfolio. Shareholders who have received this notification via royal mail, please let us have your instructions by completing the bottom of the page and returning to us in the enclosed pre-paid envelope.
Please note that due to the number of shareholders in this security, we will process your instructions upon receipt.
Valid instructions and payment must be given to take up the shares and, subject thereto, the new shares will be issued on 1st December 2008.
Many thanks for anyone that takes the time to look at this and explain it to me.
I invested in RBS shares some weeks ago, when there downward fall began to take place, as an investment for the future, well today, I have received the below email from my online trading account, I'm not quite sure what exactly it's asking me to do, or not to do....can anyone help? What exactly are my options here? I have put x's in place of my actual share qty and values.
Dear Investor
The Royal Bank of Scotland – Open offer
Your holding now: x
The Company has announced proposals to shareholders to subscribe for 18 new ordinary share for every 13 existing shares held as at 10th November 2008 at a price of 65.5p per new share.
On your above-mentioned holding, your entitlement is any number up to x new shares at a cost of £x, plus a £10 handling charge. There is an excess application facility with this offer.
If you wish to take up some or all of your entitlement, please let us have your instructions by return of email no later than 19th November 2008 (9am) ensuring that the funds are available on your portfolio. Shareholders who have received this notification via royal mail, please let us have your instructions by completing the bottom of the page and returning to us in the enclosed pre-paid envelope.
Please note that due to the number of shareholders in this security, we will process your instructions upon receipt.
Valid instructions and payment must be given to take up the shares and, subject thereto, the new shares will be issued on 1st December 2008.
Many thanks for anyone that takes the time to look at this and explain it to me.
0
Comments
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You are being invited to buy more shares in RBS.
If you don't buy them, the government will as part of its rescue package.
Question is, are you feeling lucky?
There's no obligation for you to buy. In fact, you can buy more than the allotted 13-for-every-18-you-hold, as this is an open offer rather than a rights issue.0 -
Hello and welcome to the forum
Basically, RBS is trying to raise cash from its current shareholders, ie. people like yourself, and to that end is issuing new shares.
It is offering the new shares to the current shareholders at a set price, 65.5p. So the offer is giving you the option to buy however many shares they are offering you at this price. You can buy all or some of these new shares, if you so wish.
When deciding whether or not to buy the shares you're entitled to you should bare in mind the stock market price of the shares. They're being offered to you at 65.5p in the issue, but you can buy them on the market for less than that. (Or at least you can at the time of posting.)
Whether you invest more is up to you“I could see that, if not actually disgruntled, he was far from being gruntled.” - P.G. Wodehouse0 -
Don't throw good money after bad0
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RBS shares are trading at the moment around the 60p mark.
Why would anyone take up the open offer when they can buy them 5p cheaper on the open market ?0 -
RBS shares are trading at the moment around the 60p mark.
Why would anyone take up the open offer when they can buy them 5p cheaper on the open market ?
Unless the shareprice rises before the offer closes they won't. They'll be taken up by the underwriters instead - which in this case is the Treasury.0 -
Well - it's in the interest of shareholders for the gov'ts shareholding to be as small as possible. Those preference shares will be a headache for some time to come.0
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Well - it's in the interest of shareholders for the gov'ts shareholding to be as small as possible. Those preference shares will be a headache for some time to come.Krusty & Phil Madoff, 1990 - 2007:
"Buy now because house prices only ever go UP, UP, UP."0 -
mr example, the preference shares will not change if the treasury takes up the remainder. They are fixed at £5bn and the remainder will be ordinary shares.
The problem this may present is that the treasury will most likely become a substantial owner (and will make a packet in years to come) to which they may opt to have seats on the board etc.
I was looking at the rights issue, but think I might just buy at the market rate tomorrow.
based on todays closing price of 57.5p buying at the placing value you would be paying a premium of nearly 14% to buy these shares.0 -
There is another similar offer today for RBS shares at 31.75p even though they are currently trading at 20something pence each at the moment...0
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