CompaniesOct 11 2012

Float values RBS’s Direct Line at £2.6bn

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Shares in Direct Line, Royal Bank of Scotland’s insurance arm, have been priced at 175p, giving the bank’s insurance arm an initial market value of £2.63bn.

In an announcement on the London Stock Exchange, RBS said the offer comprises 450m existing ordinary shares being sold by RBS Group, representing 30 per cent of the 1,500m ordinary shares that will be in issue at admission. Gross proceeds realised by RBS Group will be £787m.

Following admission, RBS Group will continue to hold 65.3 per cent of Direct Line’s ordinary shares assuming exercise of the over allotment option, which are subject to a 180 day lock-up.

Bruce Van Saun, group finance director at RBS, said: “We are very pleased to have successfully completed the Direct Line Group IPO as the first phase in our EU mandated disposal. This is another important milestone in RBS Group’s restructuring plan.

“The successful offering rests on outstanding effort by the Direct Line management team to re-position the business, while also gearing up to the demands of being a separate public company. We believe Direct Line is on the path to a bright future.”