RBS to offload further stake in Direct Line

RBS IS to sell off part of its stake in Direct Line through a share placing.

The bank will sell off 229.4m Direct Line shares – equivalent to 15.3 per cent of the insurer’s share capital – in a stake expected to be worth around £500m.

A further 22.9m shares will be made available by RBS under an over allotment option.

If all the Direct Line Group ordinary shares available in the offering are sold, assuming no exercise of the over-allotment option, RBS will hold 49.99 per cent of Direct Line.

The insurer was spun out of RBS at the end of last year, after being ordered by European regulators to dispose of Direct Line as a condition of its 2008 taxpayer bailout, raising £787m for the state-backed bank.

Goldman Sachs, Morgan Stanley and UBS are acting as joint bookrunners and placing agents for the offering.