RBS cuts stake in US with $3bn Citizens sale
RBS WILL cut its stake in US bank Citizens to below half this week, as it yesterday announced plans to sell off more shares in the lender.
The bailed-out British bank is cutting down its overseas presence to focus on the UK market.
It floated Citizens on the New York Stock Exchange six months ago, selling stake of almost 30 per cent in the initial public offering.
RBS agreed to a lock-up period after that sale, promising investors it would not sell any more shares for the following six months.
Now that is over, RBS is selling a further 21 per cent, taking its stake to 49.3 per cent.
If the sale goes well, it plans to sell another 17.25m shares, reducing its stake to 46.1 per cent.
Citizens shares floated at $21.50, and yesterday closed at $24.76 in New York.
As a result the sale of the 21 per cent stake could raise $2.86bn.
And with the over-allotment, the overall sell-off could bring in almost $3.3bn.
Citizens is headed by chief executive Bruce Van Saun, who was previously RBS’ chief finance officer.
Earlier this year he said he expects RBS to complete the sale of Citizens’s shares this year, across just one or two big sell-offs.
The major selldown is being run as an underwritten public follow-on offering this week, rather than a retail sale or an effort to sell stock on the open market.
RBS has hired four banks to run the book on the deal.
Morgan Stanley and Goldman Sachs are the global co-ordinators and joint bookrunners, while JP Morgan and Citi are also joint bookrunners.
They hope to build the book over the coming days and sell the stock by the end of the week.
Citizens’ shares dipped 0.16 per cent on the day.
BEHIND THE DEAL
GILLES GRAHAM – CITI
1 Gilles Graham is having a very strong year so far – last week he worked for TSB as Spanish bank Sabadell launched its bid to buy the Lloyds spin-off.
2 Other successes include the London Stock Exchange’s LCH Clearnet investment. He is Citi’s EMEA chairman for the financial institutions group.
3 Graham has had a wide and varied career so far. He worked at Nomura before coming to Citi in 2010, when he joined as part of a wave of investment bankers bolstering the team.
Also advising…
Fellow Citi banker Tyler Dickson is also working on the deal. Citi is joined by teams from Goldman Sachs, JP Morgan and Morgan Stanley who are all working for RBS to sell the Citizens shares.