Friday, November 28, 2008

Anyone happy with this deal?

Government to own majority of RBS

Existing shareholders agreed to buy almost 56 million shares, which represents just 0.24% of the new shares on offer, at a cost of £36.7m, making an immediate paper loss of £5.6m. The gap between the offer price and the current share price also means that taxpayers have made an immediate paper loss of £2.3bn based on Thursday's closing share price.

Posted by gardeniadotnet @ 10:06 AM (1283 views)
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14 thoughts on “Anyone happy with this deal?

  • Let’s riot.

    Or maybe not just yet.
    Another 2 years of financial destruction should push us to the limit.

    We are not quite at the same stage as the Thailand citizens…….yet……but we will be

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  • little professor says:

    dear oh dear…

    Hardly anyone took up the rights issue, as the offer price (65.5p) was well above yesterday’s closing price (54p) The government therefore have had to step in and buy all the unsold shared as the full 65.5p – as gardeniadotnet points out, this means we have just made a massive £2.3 billion loss, as well as becoming majority owners in one of the worlds biggest private banks

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  • What will happen if there is a ‘run’ on RBS shares now?

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  • The fact that the Labour Party cant successfully run it’s own finances should tell us all we need to know when it comes to (A) running the countries finances (B) Interfering/intervening in the private sector

    Remember Toxteth (Liverpoool) Medow Well (North Shields) Benwell (Newcastle upon Tyne) – this country isnt immune to rioting – I’ll give it another 18 months before we have a repeat up and down the UK

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  • It will be interesting to see what the shareholders holding the reamining 40% of the shares think. Does this make them safer or does the dead hand of the government mean the bank as a profitible enterprise is doomed. Points to consider:
    1. Will the government allow big bonuses to reward success. If not any competent individuals will be off leaving the dross behind?
    2. Will the bank now operate to satisfy political ends rather than commercial objectives eg lending to insolvent businesses employing large numbers in labour or marginal constituencies?

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  • “Existing shareholders agreed to buy almost 56 million shares”

    Why? Why did they agree to pay 18% more than shares selling on the open market? If they wanted more shares because they thought they were a good investment, why not buy someone else’s rather than this new issue?

    “taxpayers have made an immediate paper loss of £2.3bn based on Thursday’s closing share price.”

    Down a further 3.7% at the moment…

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  • a question for you guys………. i’ve lost track of this……….. which banks have accepted/taken bail out monies from the govt/taxpayer and which have not? I quickly tried to research this online, but someone may have a quick link. thanks in advance if anyone chips in……..

    a follow up question is……… do you reckon that the govt could nationalise the banks which have not accepted bail out monies? I.e. HSBC (as far as I’m aware) hasn’t accepted a penny, and are not UK owned – but could they nationalise the UK arm of HSBC? I can’t see that happenning myself and I think the govt are just using this “we’ll nationalise you if you don’t lend” line as a threat (but anything wouldn’t suprise me to be honest).

    it’s all a bit confusing eh? the banks “must” lend, but lending at ridiculous levels caused this whole mess. the regulators say “don’t lend” or “lend prudently”, the govt says “lend at 2007 levels” (i.e. unresponsibly). get the story straight lads! i don’t think i have a problem with lending to small/medium sized businesses, but mortgage lending at 2007 levels? do me a favour!

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  • @ana lytics – Banks which did not go for Gov money (off the top of my head) are Standard Chartered, Barclays (both of which are now raising money elsewhere) and HSBC the remainder of the big UK Banks elected to say they would (or might) utilise the facility.

    The FSA have instructed the Banks to improve their capital adequacy whilst the Gov want them lending again almost as before – they cant have it both ways and hence the confusion.

    The Gov will look to full Nationalisation if they dont begin lending (perhaps all part of Crash Gordons master plan) – HSBC wouldnt be part of this game.

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  • planning4acrash says:

    The must lend statement is Blatent double think. Lending is risky. Why make money risking capital when you can just rely on handouts? Why play a rigged market when you can fall asleep under the goose feather duvet of the communist bedroom?

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  • A very uncomfortable time for these share holders…….. and I would imagine there is a strong possibility of a massive sell-off before the conceived loss is total…….. Can government guarantee the share price? The bank has one thing on its side and that is: Better the Devil you know.

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  • 3. gardeniadotnet said…
    What will happen if there is a ‘run’ on RBS shares now?

    I’ll lose a few grand 😉

    11. plato said…

    I have taken a gamble and I will suffer the consequences either way. I had hoped the Gov’t would slacken the “no dividend policy” a little to make the shares a little more attractive to the share holder.

    The banks will want to pay Gordie off ASAP so they can release themselves from the shackles and start luring investors back in with dividend payouts etc… But how are they going to do this when the Gov’t intend to insist that the banks start lending money to the public to buy a rapidily depreciating asset? Gordie can’t have it both ways, does he want the banks to return to profit and independance? Does he want our tax payers money back??

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  • Does this give the gov more access to rbs int accounts?

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  • @8

    thanks jack…….. much obliged….

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