Direct Line float priced at £2.6bn

Direct Line today announced that it would price its IPO at £2.6bn, slightly below analysts’ expectations.

The insurance firm, owned by high-street bank RBS, will offer up between 375m to 500m shares when it lists on the London Stock Exchange on 11 October.

RBS, which is 83 per cent-owned by the government, had to either sell or float the business by next year as a condition of its bailout in 2008.

The pricing comes as the Office of Fair Trading is investigating the car insurance industry over high premiums.

Meanwhile, Direct Line said today that trading in the second half of the financial year was in-line with expectations.