LONDON Royal Bank of Scotland (RBS.L) has nudged up an offer to settle the last of five damages claims by investors over its record 12 billion pound ($15 billion) emergency cash call in 2008, two sources familiar with the situation said on Tuesday.
Hoping to avoid a trial that will rake over its near collapse and state bailout, the Edinburgh-based bank is raising its offer to the RBoS Shareholder Action Group, which includes 27,000 private investors, former and current RBS staff and about 100 institutions, by 2 pence per share to 43.5 pence.
One source said the increase, designed to help cushion the group's added legal costs after four other investor parties settled separate cases against the bank, would raise the cash on the table by just under 10 million pounds to about 170 million.
The offer is set at a fraction of the shareholder group's original 1.2 billion pound claim, including interest and costs. Claimants bought into the cash call at 200 to 230 pence per share.
But with a costly trial set for May, a move by RBS to raise the stakes could split more pragmatic institutional investors, which include Bank of America Merrill Lynch, Axa and Aberdeen Asset Management and small shareholders, who saw personal funds decimated in the wake of the rights issue.
RBS last year set aside 800 million pounds to settle claims totaling around 4 billion pounds from five investor groups in an unprecedented lawsuit over alleged omissions and misrepresentations about its financial strength when the bank launched the rights issue as the credit crises raged.
Four investor parties accepted their share of the out-of-court offer settlement last December. But the RBoS Shareholder Action Group pledged to see the bank and former top executives, including former CEO Fred Goodwin, in court.
Reuters reported two weeks ago that lawyers for both sides had held fresh tentative settlement talks but that some private investors in the vast RBoS claimant group remained determined to take the case to trial.
Any final settlement would draw a line under one of the most complex and costly litigation battles in English legal history. It would also spare RBS a lengthy and potentially damaging trial, that is scheduled to bring disgraced former chief executive Fred Goodwin and other former top executives to court.
The RBoS action group declined to comment.
(Editing by Keith Weir and Susan Thomas)