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Commercial banks

Royal Bank of Scotland to Receive $15 Million Payment from Birmingham Midshires

Strategic Insights

— 1 min read

The Royal Bank of Scotland is poised to receive a significant payment of $15 million from Birmingham Midshires Building Society, following the latter's release from a $630 million buy-out agreement. The decision comes as Halifax plc has stepped in with a larger offer of $780 million, resulting in the cancellation of the original deal. Birmingham Midshires had already agreed to pay the Royal Bank $5 million compensation for costs after pulling out of the framework agreement made in August.

Key Takeaways:

  • The Royal Bank of Scotland will receive a $15 million payment from Birmingham Midshires Building Society.
  • The payment is in addition to the $5 million compensation already agreed upon for costs.
  • The $15 million payment will be triggered if Birmingham Midshires transfers its business to Halifax before January 1, 2000.
  • Birmingham Midshires' one million members can expect an average windfall payout of $780 if the deal with Halifax goes ahead.
  • The deal with Halifax offers a higher payout compared to the original Royal Bank offer of $630 per member.
  • Speculation exists that other bidders may now step into the fray, potentially offering even larger payouts for members.
  • George Mathewson, chief executive of The Royal Bank of Scotland Group, stated that the bank was disappointed with the decision to release Birmingham Midshires.
  • Mike Jackson, chief executive of Birmingham Midshires, stated that the society is pleased to have reached an agreement with the Royal Bank, but is disappointed with the failed proposal.

Statistics:

  • $15 million: The amount Royal Bank of Scotland will receive from Birmingham Midshires.
  • $5 million: The compensation Birmingham Midshires agreed to pay the Royal Bank for costs.
  • $630 million: The original buy-out agreement with the Royal Bank.
  • $780 million: The revised offer put forward by Halifax plc.
  • $780: The average windfall payout for Birmingham Midshires' one million members if the deal with Halifax goes ahead.
  • January 1, 2000: The deadline for Birmingham Midshires to transfer its business to Halifax before the $15 million payment is triggered.

Sources:

  • "Royal Bank of Scotland to Receive $15 Million Payment from Birmingham Midshires" (exact wording as in the original text).
  • George Mathewson, chief executive of The Royal Bank of Scotland Group (exact quotation in the original text).
  • Mike Jackson, chief executive of Birmingham Midshires (exact quotation in the original text).

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