The poor response of investors to Bradford & Bingley’s rights issue completes an ignominious hat trick of dismal capital-raisings from UK banks.
Investors took up just 28% of the £400 million-worth of new shares on offer, leaving the deal’s underwriters led by Citi and UBS and including a syndicate of the UK’s biggest banks stuck with the rest.
Although the take-ups for the recent rights issues of HBOS and Barclays were worse, at 8.3% and 19% respectively, underwriters were able to escape footing the bill thanks to a bounce in the share price of the former and the clever structure of the latter. B&B’s syndicate, however, has had to pledge to hold the stock, worth about £320 million, for almost three weeks before trying to offload it....
