RBS Shares...Any English speakers out there?!

J_Devon

Hey guys and gals...

Could anyone explain in simple terms what the deal is with this Placing and Offer business which the RBS shares are going through at the moment. I've been reading various documents trying to get some idea but its like reading a foreign language.

I have a hoodless brennan account, and I've just logged in to find I have an addtional 588 shares under this heading "RBS ORD 25P ENT" but this doesnt have a book cost filled in next to it (like the rest of the shares I have purchased.

From what I have read so far, they are offering existing share holders, 3 new shares for every 7 existing shares that they currently have, at a price of 31.75p per share

My questions are:

1. If I dont want to take these shares, I assume I just dont fill in the book cost and ignore it? (there is a deadline of the end of the month I believe to take action).
2. What happens to the old shares that I already have? Should I be selling now?
3. When the new shares are put onto the stock market (half way through April), are there going to be 2 sets of shares for RBS, or are they going to merge?!

In amongst the large amount of text found here:

http://212.26.144.174/share2607share/news0903/090316rbs9208o.htm

It says that the 31.75p / share is "an 8.5 per cent. discount to the closing price on 16 January 2009". Thats all well and good, but the shares are about 10p cheaper than that now, so what are the advantages of having these "new" ones?

Please excuse my ignorance and lack of knowledge on this subject. I'd be most grateful for any information anyone could provide. If you need any more information please let me know.

Thanks in advance,
James

iainst26

Yeah, looking for some clarification on this aswell, currently my hoodless has 337 RBS ORD 25P ENT shares and 2,000,000,000 RBS ORD EXCESS ENT shares lol

J_Devon

Yes, I've also got the 2 billion shares under my 588.

I'm assuming thats the maximum allocation?

shrewsaver

I have had this through my online sharedealing a/c too. It says the maximum allocation available is 16,909,716,385 (thats 16 billion shares!).

It is underwritten by the UK HM treasury, so as I understand it if no-one takes up this offer or not all shares in the open offer are sold to existing shareholders then the Treasury will buy the rest i.e. will be owned by the taxpayers (UK Government will have a bigger stake in the bank).

J_Devon:

1) Yes, exactly if you don't want to buy them then don't do anything.
2) Nothing
3) They would probably come under the same heading.

J_Devon wrote:

It says that the 31.75p / share is "an 8.5 per cent. discount to the closing price on 16 January 2009". Thats all well and good, but the shares are about 10p cheaper than that now, so what are the advantages of having these "new" ones?

Yes, but as I have written above if no-one takes up this offer the governement will take a controlling stake and ordinary shareholders like you and me could possibly loose out if this happens i.e. another Northern Rock etc.

sabretoothtigger

Rbs offer price is at a premium to the current market price and lloyds is actually a discount offer so you'd only bother with lloyds right now

J_Devon

Thanks for the replies

Given the current price, I'll obviously pass on this "offer" and see what happens to the shares I already have.

Thanks again

Hatone

I've had the same too.

Why are RBS asking over 25% more than existing share prices???

If I were to issue new shares and raise more capital to avoid further government stake, my logic tells me it is best to offer them at price that is either less or equal to existing share prices.

And the 1 year RBS share price estimate is just over 30p - meaning I won't be making a profit on these new shares for at least 1 - 2 years.

All I get in return is just voting rights.

Buddy195

Is there anyone out there considering taking up their option? It doesn't look great to me at the moment???

prowla

Give them a break - they've got to pay the pension, haven't they?