RBS Open Offer ??

rgwhunter

I recently bought my first shares in RBS, at 24p i thought it was worth a gamble, they have now sent out an ''open offer'' - what does this mean??

I can see they are offering me shares for 31.75p each but why would i buy them at that price when they are on the market for 24p??

This was their offer:

''The Royal Bank of Scotland Group has announced an open offer whereby shareholders may subscribe for 3 new shares, at a price of 31.75 pence per new share for every 7 shares currently held. Subscribing shareholders are

able to apply for additional shares above their basic entitlement, and such applications are subject to scaling back.''

Can anyone help me?

Thanks

Ross

opinions4u

rgwhunter wrote: »

I recently bought my first shares in RBS, at 24p i thought it was worth a gamble, they have now sent out an ''open offer'' - what does this mean??

It means that to pay for the Asset Protection Scheme (the insurance scheme that basically guarantees the bank will be able to survive future potential losses) the bank need to issue more shares. They are asking you to buy some. If you don't, the government will.

I can see they are offering me shares for 31.75p each but why would i buy them at that price when they are on the market for 24p??

You wouldn't and shouldn't. If you want extra ones, buy them on the open market! If you don't want extra ones, do nothing.


Sit tight and see how your gamble goes!

rgwhunter

Thanks for the quick reply, common sense would suggest it was a c##p deal but as i'm a rookie i thought i better check it out first.

thanks again

Ross

ad44downey

rgwhunter wrote: »

I can see they are offering me shares for 31.75p each but why would i buy them at that price when they are on the market for 24p??

It's a classic mug trap. You'd be suprised how many people fall into it.

dudes_2

I thought the open offer was issued when share price of RBS was higher. It seems ridiculous now, but probably wasnt on the day.

I cant agree that it is a classic mug trap. Its not like RBS are running a boiler room

Anyway, yes, only worth buying them on the market