Government brings ownership of NatWest to 22.5%

Published

12 months ago

May 31, 2024

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Life comes at you fast if you are the person responsible for maintaining the shareholder register at NatWest.

Until last week, it was hoped that the bank would be at the centre of Jeremy Hunt‘s plans to get millions more Britons investing in the stock market.

Money latest: Income growth ‘worst in generations’

The chancellor first said last year that he hoped a new generation of retail investors could “engage with public markets” by buying some or all of the government’s remaining shareholding in NatWest.

With a nod to Margaret Thatcher’s successful privatisations in the late 1980s – which saw more than 10 million Britons become shareholders for the first time via stakes in businesses like British Telecom, British Airways and Rolls-Royce – the chancellor conjured up the spirit of the “If you see Sid, tell him” advertising campaign that, in autumn 1986, convinced more than 1.5 million Britons to buy shares of British Gas.

He told MPs in November: “It’s time to get Sid investing again.”

Those plans have now been scuppered by the unexpectedly early general election and the retail offer was formally shelved last weekend.

Determined to return to private ownership

Today, though, brought evidence that the government remains determined to return NatWest to private ownership.

It announced it has sold £1.24bn worth of shares in the lender back to NatWest itself – taking its stake down from nearly 26% to 22.5% in the process.

That stake, at its peak, had stood at nearly 84% after Gordon Brown‘s government was forced to rescue the lender – then called Royal Bank of Scotland – in 2008 at the height of the global financial crisis.

The government took its stake below 30% – which is deemed to be a controlling shareholding – with a sale to institutional investors in March this year.

The latest sale, carried out off-market, was at a price of 316p-a-share – a smidgen below NatWest’s closing price of 316.2p on Thursday night. It is the fourth such buy-back by NatWest of its shares from the government since 2021.

‘Important milestone’

Paul Thwaite, NatWest’s chief executive, said: “This transaction represents another important milestone for NatWest Group, building on recent momentum in the reduction of HM Treasury’s stake in the bank.

“We believe it is a positive use of capital for the bank and for our shareholders and represents further progress against the ambition to return NatWest Group to full private ownership.

“Our focus remains on delivering for our customers which will, in turn, deliver for our shareholders and the UK economy.”
There are a few observations to make here.

The first is that, attractive as it would have been to get a new generation of retail shareholders investing in the UK stock market, selling down the government’s stake in NatWest in this way delivers better value for money for taxpayers.

That is because the government would have been forced to sell its NatWest shares at a significant discount to the prevailing market price to encourage retail investors to pony up.

It would also probably have had to have offered other incentives, such as bonus shares for those shareholders retaining their stake for a year, to avoid those investors from ‘stagging’ the issue, in other words, buying the shares at a discount and then selling them immediately to lock in a modest profit.

Likely a shareholder for years but more sales in the coming weeks

The second observation is that the government – whoever wins the general election – is likely to remain a shareholder in NatWest for some time to come.

While a retail share offer might not necessarily have represented good value to taxpayers, it would certainly have accelerated the bank’s full return to private ownership. Mr Hunt has pledged to return NatWest to full private ownership by the end of 2026.

And a third is that this latest move does not preclude further share sales in coming weeks.

The Treasury has been using three ways to reduce its stake.

One is via direct sales to NatWest itself. This is unlikely to happen again for a while because it needs to be approved by NatWest shareholders – and the most recent authorisation has just been fulfilled by the latest purchase.

The second is via sales of large portions of the government stake to shareholders – which requires a sign-off by ministers and is therefore unlikely during the election campaign.

The third is via the Treasury’s existing sales plan, under which small quantities of stock shares are released into the market, which is probably the way forward for now.

The government’s exit via this latter route will undoubtedly be aided by the rally in NatWest shares which, since the start of the year, are up by just over 43%. The lender recently published its best annual results since the rescue of the old RBS.

What does Labour make of it?

What is not yet clear is the attitude that a future Labour government might take on the stake in NatWest.

It was always suspected when Jeremy Corbyn was Labour leader that, should he become prime minister, he would have retained the shareholding.

Sir Keir Starmer, by contrast, is assumed to be sympathetic to selling down the stake just as the current government is.

As Gary Greenwood, banking analyst at the investment bank Shore Capital, told clients earlier this week: “Should the Labour Party come to power, as widely anticipated, then such plans [for a retail share offer] are likely to be revisited and possibly amended.

“That said, whoever wins the election will still be looking to reduce and ultimately exit the Government’s stake in NatWest, in our view, so the sell down is still likely to continue in one form or another.”

Mr Thwaite and his colleagues would doubtless like to see NatWest returned to private ownership as quickly as possible so they can get on with running the bank and restoring its fortunes.

It would be helpful for all concerned were Mr Hunt’s shadow, Rachel Reeves, to make it clear where Labour stands on the timing of this.

Business

Concierge firm founded by Queen’s nephew hunts buyer

Published

10 hours ago

May 17, 2025

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Concierge firm founded by Queen's nephew hunts buyer

Quintessentially, the luxury concierge service founded by the Queen’s nephew, is in talks to find a buyer months after it warned of “material uncertainty” over its future.

Sky News has learned that the company, which was set up by Sir Ben Elliot and his business partners in 1999, is working with advisers on a process aimed at finding a new owner or investors.

City sources said this weekend that Quintessentially was already in discussions with prospective buyers and was anticipating receipt of a number of firm offers.

Sir Ben, the former Conservative Party co-chairman under Boris Johnson, owns a significant minority stake in the company.

The Quintessentially group operates a number of businesses, although its core activity remains the provision of lifestyle support to high net worth individuals including celebrities, royalty, and leading businesspeople.

It also counts major companies among its clients and offers services such as organising private jet flights and performances by top musicians.

The sale process is being overseen by a firm called Beyond, although further details, including the price that the business might fetch, were unclear on Saturday.

One insider said parties who had been contacted by Beyond were being offered the option to buy a controlling interest in Quintessentially.

This could be implemented through a combination of the repayment of outstanding loans, an injection of new funding into the business, and the purchase of existing shareholders’ interests, they added.

Quintessentially’s founders, including Sir Ben, are thought to be keen to retain an equity interest in the company after any deal.

In January 2022, newspaper reports suggested that Quintessentially had been put up for sale with a valuation of £140m.

Deloitte, the accountancy firm, was charged with finding a buyer at the time but a transaction failed to materialise.

Sir Ben, who was knighted in Mr Johnson’s resignation honours list, turned to one of Quintessentially’s shareholders for financial support during the pandemic.

World Fuel Services, an energy and aviation services company, is owed £15.5m as well as £3.5m in accrued interest, according to one person close to the process.

The loan is said to include a warrant to convert it into equity upon repayment.

Quintessentially does not disclose the number or identities of many of its clients, although it said in annual accounts filed at Companies House in January that it had increased turnover to £29.6m in the year to 30 April 2024.

The accounts suggested the company was seeing growth in demand from clients internationally.

“During the last year, we have not only renewed important corporate contracts like Mastercard, but have also expanded by adding new corporate clients like Swiss4 in the UK, R360 in India, and Visa in the Middle East and South America,” they said.

In its experiences and events division, it won a contract to work with the Red Sea Film Festival and to provide corporate concierge services to the Saudi Premier League.

It added that Allianz, the German insurer, BMW, and South African lender Standard Bank were among other clients with which it had signed contracts.

The accounts included the warning of a “risk that the pace and level at which business returns could be materially less than forecast, requiring the group and company to obtain external funding which may not be forthcoming and therefore this creates material uncertainty that may cast ultimately cast doubt about the … ability to continue as a going concern”.

This weekend, a Quintessentially spokesman declined to comment on the sale process.

Business

Superstar Adele joins backers of music royalties platform Audoo

Published

1 day ago

May 16, 2025

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Superstar Adele joins backers of music royalties platform Audoo

Adele, the Grammy award-winning artist, has joined the list of music superstars investing in Audoo, a music technology company which helps artists to receive fairer royalty payments.

Sky News has learnt that the British musician and Adam Clayton, the U2 bassist, have injected money into Audoo as part of a £7m funding round.

The pair join Sir Elton John, Sir Paul McCartney and ABBA’s Bjorn Ulvaeus as shareholders in the company.

Changes to Audoo’s share register were filed at Companies House in recent days.

Audoo, which was established by former musician Ryan Edwards, is trying to address the perennial issue of public performance royalties, in order to ensure musicians are rewarded when their work is played in public venues.

Mr Edwards is reported to have been motivated to set up the company after hearing his own music played at football stadia and in bars, without any payment for it.

Estimates suggest that artists lose out on billions of dollars of unaccounted royalties each year.

London-based Audoo uses a monitoring device – which it calls an Audio Meter – to recognise songs played in public venues, and which is said to have a 99% success rate.

It has struck what it describes as industry-first partnerships with organisations including the music licensing company PPL/PRS to track and report songs played in public performance locations such as cafes, hair salons, shops and gyms.

“At Audoo, we’re incredibly proud of the continued support we’re receiving as we work to make music royalties fairer and more transparent for artists and rights-holders around the world through our pioneering technology,” Mr Edwards told Sky News in a statement on Friday.

“We have successfully reached £7m in our latest funding round.

“This funding marks a pivotal moment for Audoo as we focus on our growth in North America and across Europe, bringing us closer to our mission of revolutionising the global royalty landscape.”

Sources said the new capital would be used partly to finance Audoo’s growth in the US.

The latest funding round takes the total amount of money raised by the company since its launch to more than $30m.

Mr Edwards has spoken of his desire to establish a major presence in Europe and the US because of their status as the world’s biggest recorded music markets.

Adele’s management company did not respond to an enquiry from Sky News.

Business

The Sunday Times Rich List: Billionaires fall as King rises to match Rishi Sunak

Published

1 day ago

May 16, 2025

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The Sunday Times Rich List: Billionaires fall as King rises to match Rishi Sunak

The King’s personal fortune has shot up by £30m to put him on par with Rishi Sunak and his wife Akshata Murty, while the overall number of billionaires in the UK has plummeted, according to The Sunday Times Rich List.

The 2025 list, published on Friday, shows the King’s personal wealth grew from £610m to £640m, taking him up 20 places to 258 – level with former prime minister Mr Sunak and his wife.

The number of overall UK billionaires has fallen to 156 from 165 in 2024, marking the biggest drop since the rich list began 37 years ago.

Gopi Hinduja and his family, behind the Indian conglomerate Hinduja Group, topped the list for the fourth year running with £35.3bn.

Meanwhile, founder and chairman of global chemicals company Ineos Sir Jim Ratcliffe, who became part owner of Manchester United last year, dropped from fourth place to seventh after his reported wealth went from £23.5bn to £17.05bn.

Sir Jim’s £6.47bn losses marked the biggest on the list, while Russian-born brothers Igor and Dmitry Bukhman, who built a fortune on mobile games such as Gardenscapes and Fishdom, made the biggest gains with nearly £6.2bn.

New entries included makeup mogul Charlotte Tilbury with £350m and Ellen DeGeneres, who left the US for the Cotswolds last year.

The Sunday Times said the list was one of its toughest to compile due to Donald Trump’s tariffs and the subsequent stock market turbulence, adding many from previous years had dropped off the list and others were no longer eligible having fled Britain after Labour’s non-dom crackdown.

Overall, the combined wealth of those on the list stood at £772.8bn – down 3% from the last list.

Speaking to Anna Jones on Sky News Breakfast, Rich List compiler Rob Watts highlighted the story of Tom and Phil Beahon, who own sportswear clothing brand Castore which is now worth £1bn, as one of his favourites.

The brothers from Wirral have debuted at joint 345 on the list with an estimated wealth of £350m.

Calling their story “inspiring”, Mr Watts said: “They dreamed of being sportsmen as lads – one of them got onto the books of Tranmere Rovers and the other played cricket for Lancashire, but their sporting careers were over in their early 20s.

“And they say that failure was critical to driving them to create this £1bn sports kit business that you’ll now see being worn by the England cricket team and the England rugby team.”