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NBNK Investments

  • BY: Andrew Hore |
  • POSTED: 07/01/2013 |

Cash shell NBNK Investments is being given a new lease of life thanks to a 6.27m subscription by US billionaire Wilbur Ross and the WLR funds and most shareholders have turned down the chance to get out via a tender offer.

Shareholders tendered 12.4m shares at 39p a share, compared with the original flotation price of 100p. The subscription price is also 39p a share and 4.82m of the cash raised will go towards the funding of the tender offer and the remaining cash will be put towards the new acquisition strategy.

NBNK had given up trying to buy UK banking assets but it will widen its search for acquisitions to include financial and insurance businesses in Continental Europe.

Wilbur Ross will become chairman of NBNK and the existing directors will step down with the exception of Lord Brennan of Bidbury.WLR already owns 45% of Virgin Money, which acquired Northern Rock assets last year. NBNK was interested in Northern Rock as well as assets of Lloyds Banking Corporation but the latter have not been sold because Lloyds was not happy with the level of bids.

Ross and WLR will end up with 29.9% of NBNK. They are being issued with placing warrants equivalent to 2.4% of the fully diluted share capital and founder warrants equivalent to 0.49%.

The new strategy is backed by Investec, which is the second biggest shareholder in NBNK, however, Goldman Sachs has reduced its stake from 8% to below 3%.

At 42.5p a share, NBNK is valued at 22.9m.

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