From (I haven’t seen this story reproduced elsewhere yet, even in the British press. This is strange, considering it’s 8.00 pm in the UK as I post) the International Herald Tribune:
U.K. takes over Royal Bank of Scotland
By Julia Werdigier
International Herald Tribune
Friday, November 28, 2008
LONDON: The British government took majority control of Royal Bank of Scotland on Friday after investors shunned the lender’s share sale, paving the way for a larger government role in Britain’s banking sector.
Investors only signed up for 0.24 percent of the shares, which were offered as part of a plan to bolster the bank’s capital, and the government had to take up the rest, leaving it with a 57.9 percent stake in RBS. The government agreed to buy a separate block of preferred shares bringing its investment in RBS to about 20 billion pounds, or $31 billion. The investment leaves taxpayers already with a paper loss of more than $3 billion, based on the closing share price Thursday.
RBS was one of three British financial services companies that tapped government help to fulfill stricter capital requirements intended to help them survive the credit crisis. Lloyds TSB and the mortgage lender HBOS, which have recently agreed to combine, also relied on the government to take up any shares they could not sell to investors as part of a banking bailout plan orchestrated by Prime Minister Gordon Brown. But some analysts warned that even those stricter capital rules might not guarantee the stability of Britain’s banks as the turmoil in the financial markets continued.