View the article online at http://citywire.co.uk/wealth-manager/article/a705795
RBS strikes £600m deal to offload branches & create new 'challenger' bank
by Sarah Miloudi on Sep 27, 2013 at 14:13
Royal Bank of Scotland (RBS) has struck a £600 million deal to offload more than 300 of its branches.
There were a number of offers on the table for the branches, which RBS was required to sell under EU rules following its acceptance of government bailout money in 2008.
The winning bid was led by Centerbridge Partners and RIT Capital Partners-backed Corsair Capital, two US private equity managers, which will run the business under the historic Williams & Glyn banking brand dropped by RBS in 1985.
RBS chairman Philip Hampton said: ‘We are delighted to be working in partnership with these investors to establish a new challenger bank for UK customers.'
Under the terms of the deal RBS will raise £600 million through a bond issue prior to a planned IPO at a later date, probably within the next two years.
The bondholding will convert into shares following the float, but not represent more than a 49% stake in the new bank.
The bond will be fully subscribed with the investor consortium paying £330 million in cash and the remaining £270 million being paid by the RBS markets divisions. The investors will take on the RBS stake over time.
News sponsored by:
As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.
Today's top headlines
The Citywire guide to investment trusts
Investment trusts have proved to be a highly effective way to invest in the market. Citywire has interviewed the experts to find out more.
With talk on interest rates on the horizon, our latest roundtable debate covers income investing against a changing backdrop
More about this:
Look up the shares
On the road
J.P. Morgan Elect on investment growth, income and cash. More information on J.P. Morgan investment trusts.