Royal Bank of Scotland trial looks to be off: Shareholder group votes to accept 82p-per-share compensation offer
The Royal Bank of Scotland trial appears to be off, with the shareholder action group said to have accepted a settlement offer this morning.
The High Court judge was informed of the decision at 11am today, a source close to the group told City A.M.
Directors of the shareholder group voted to accept the 82p-per-share offer at a meeting last night, they added.
Read more: RBS “diehard” investors in race to cover legal costs
The news appears to indicate that the hotly-anticipated 14-week trial will not take place, despite the wishes of thousands of “diehard” retail investors.
Larger investors – including, crucially, Trevor Hemmings, who was funding a large part of the action – had already accepted the 82p-per-share offer.
But the so-called “diehards” were determined to force it through and were increasingly confident of raising the £7m needed to force through the trial. Businessman Neil Mitchell, who has worked closely with the action group, said last night that he had reached a deal to fund the last £2m needed.
However, sources have indicated that the directors’ vote is binding and that there appears no realistic prospect of the “diehards” forcing through the trial by themselves.
Read more: A settlement would shred Fred’s RBS inquisition
If this proves to be the case, it would bring to a close a highly complex process, which has twisted and turned over the past fortnight.
Timeline
22 May: Trial adjourned for 24 hours at last minute as RBS makes last-ditch, 82p-per-share settlement offer
23 May: Trial adjourned for another 24 hours; court is told “the majority of claimants have indicated their willingness to accept the latest offer from the defendant”
24 May: Judge adjourns trial for third time, this time until 7 June, for settlement to be reached
27 May: Shareholder action group writes to claimants saying it will be accepting 82p-per-share offer, warning of risks it will not achieve a better outcome
Big shareholders, including institutional investors and Trevor Hemmings, who was funding a large part of the action, have accepted the offer, leading to a lack of funding for the legal fees
1 June: Thousands of retail shareholders scramble to fundraise £7m in legal fees, which some believe will be enough to force through the trial or gain an improved settlement offer
2 June: Shareholder action group meets RBS chief executive Ross McEwan, who refuses to raise the offer further
5 June: Directors of action group vote to accept 82p-per-share offer, sources tell City A.M.
6 June: Shareholder action group informs judge of acceptance, according to sources
The action group and RBS have so far declined to comment.
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