Royal Bank of Scotland Group plc (LON:RBS) has reportedly offered to pay millions of pounds to settle legal action over its 2008 rights issue.
The bank’s lawyers have recommended a 43.5p-per-share settlement in the last fortnight to the RBoS Shareholder Action Group, which is suing the lender for allegedly misleading investors ahead of the £12bn fundraising, Sky News reported.
Shortly following the rights issue, RBS had to be rescued by the government as the financial crisis hit. RBS is still 73%-owned by taxpayers following the £45.5bn bailout as it continues to tackle legacy issues.
The Action Group, which counts 27,000 former RBS shareholders among its members, is the last-remaining claimant seeking compensation for losing money after subscribing to new shares in the bank.
RBS has reached a 41.5p-per-share settlement with four other claimant groups in recent months.
It is understood the proposed settlement with Action Group is 2p-per-share higher to cover bigger legal fees since resolving earlier claims.
However, sources told Sky the Action Group had rejected the settlement as many of its members want to see the case through to a trial that is due to begin in May.
Some of the group’s members are willing to settle but want 92p per share, Sky said.
If the case reaches court, Fred Goodwin is likely to be asked to give evidence as he was the bank’s chief executive at the time of the rights issue.
Goodwin and former chairman Sir Tom McKillop have been named as defendants in the case, which has accused the lender of misrepresenting its financial health before the rights issue.
RBS and the Shareholder Action Group both declined to comment on the report.
The lender has paid more than £100mln defending the case.