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RBS prices Citizens share offering for end-of-year exit

RBS prices Citizens share offering for end-of-year exit

The Royal Bank of Scotland Group has confirmed final pricing of its share offering in Citizens Financial Group - comprising 86m shares, or 16 per cent of common stock at a public offering price per share of $26 (£16.60).

Yesterday (28 July), RBS announced its intention to sell part of its shareholding in Citizens Financial Group in an underwritten public follow-on offering to that started in March.

The bank has now granted a 15 per cent over-allotment option, under which the underwriters have a 30-day option to purchase an additional 12.9m shares at the public offering price, less the underwriting discount.

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If the underwriters exercise this option in full, the total offering size, including the shares pursuant to the over-allotment option, would comprise 98.9m shares, or 18.4 per cent of Citizens’ common stock.

Gross proceeds realised by RBS will be $2.2bn (£1.41bn), with the cash proceeds being used for general business purposes.

Concurrently, Citizens also intend to repurchase a further 9.6m shares of its common stock from RBS at the offering price in a directed buy back.

Following the offering and buy back, RBS will continue to hold up to 23.4 per cent of CFG’s shares of common stock, subject are subject to a 60 day lock-up.

Ross McEwan, chief executive at RBS, commented that the sale is an integral part of their capital plan. “It will help us to create a simpler, stronger and more efficient UK-focussed bank that can better serve the needs of its customers.

“This offering will leave us owning just over 20 per cent of Citizens. We are now targeting to be able to exit Citizens fully by the end of 2015, a year ahead of the original deadline.”

Citizens Financial Group is the 13th largest retail bank holding company in the United States, with $137.3bn (£88bn) in assets at the end of June.

peter.walker@ft.com