Citigroup rate Royal Bank of Scotland share value

Royal Bank of Scotland (RBS) cash call for £15 billion expired yesterday as the banks shares plummeted below the offer price. To bolster RBS’s finances, the government agreed to purchase any of the 22.9 billion new shares if the existing shareholders did not buy them.

Due to RBS share price closing at 53.60p much lower than the offer price of 65.5p many institutional investors would reject the offer, allowing the UK government to take a 58 percent stake in the Royal Bank of Scotland.

Barclays Global and Legal & General were among leading institutions that were unlikely to have taken up their rights in the share offer, however both banks have not commented on the proposed deal.

Directors of RBS own around 3.2 million shares and Sir Tom McKillop RBS Chairman said that they will subscribe for shares. On Friday RBS will unveil the results of the share offer,

Citigroup put RBS price target at 100p and rated the shares a buy in the medium term.

Source: scotsman

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