Natwest are offering 175p (plus accrued dividends) for NWBD.L: https://investegate.co.uk/nat.westminster-bk--natn-/rns/tender-offer/202106071556180760B/
This is a small premium to the pre-announcement market price, and higher than these have ever traded. However, I'm minded not to accept, since:
- I don't need the cash - I have no good place to put it.
- I'm sitting on a large capital gain so would have a hefty tax bill.
- The running yield at 175p is about 5.1%. This is not far off that of e.g. AV-A, which I also hold. Trading one for the other just crystallises a tax bill which I could otherwise defer indefinitely (with its real cost diminishing each year due to inflation).
- I don't see any increased risk of Natwest attempting to redeem these by underhand means. All shares repurchased will be cancelled, so couldn't be used to vote them out of existence.
I anticipate:
- This will be the only tender offer for some time. Maybe there'll be another in 2026, around the time these stop qualifying as capital. I'm not holding out for a better offer.
- Trading these will become even harder. But that's fine, I have no plans to sell. I'm happy to hold and reap the dividends indefinitely.
- There's obviously an ongoing risk that Natwest attempt to disappear these shares at par somehow. This tender offer just makes it obvious they would rather these shares no longer existed. I don't see the risk as that huge - even pre-tender-off these are only £140m-worth - surely not worth the legal/reputational impact of going down the Aviva route.
