By Corrie Driebusch
Royal Bank of Scotland Group PLC sold 135 million shares of
Citizens Financial Group Inc. in an offering that priced at $23.75
a share late Wednesday, according to people familiar with the
deal.
The price represented a 6.8% discount to its closing price of
$25.49 on March 12, the last close before the regional bank
announced the share sale.
The offering raised $3.2 billion for RBS, and with the sale,
RBS's ownership level dropped below 50%.
The discount is more than the average discount of 6% for
U.S.-listed follow-ons so far this year but below the average 7.4%
discount for follow-on offerings in 2014, according to
Dealogic.
The sale by RBS appeared to go smoothly--a contrast to last
September, when Citizens launched its IPO. At the time, it took
some convincing of potential investors.
Ahead of its IPO, in March 2014, Citizens failed to meet
requirements of the Federal Reserve's "stress test," an annual
review to measure a firm's ability to continue lending during a
severe economic downturn. During its IPO roadshow, Citizens
executives openly admitted the bank needed to boost its financial
performance.
Management at the bank has repeatedly touted specific plans for
improvement, including achieving a 10% return on equity by the end
of 2016 through cost-cutting and loan growth. In its fourth-quarter
results, Citizens appeared to be making progress toward its goals,
reporting 6.8% adjusted return on equity compared with 6.2% for the
third quarter.
Write to Corrie Driebusch at corrie.driebusch@wsj.com
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