Direct Line set for float with full order book
DIRECT Line Group’s IPO is set to go ahead next week after investors agreed to buy all the shares that are being offered for sale, a source close to the deal said yesterday.
Covering the entire order book just three days into an investor roadshow is considered a major success and increases the likelihood that RBS can push up the amount it receives for its insurance unit. The bank is aiming to sell a third of Direct Line next Thursday, with a mid-range price valuing the firm at £2.66bn.
Meanwhile interest from retail investors continues to grow, with Richard Hunter of Hargreaves Lansdown telling City A.M. that “thousands” of customers had registered for shares.
“It’s the biggest retail offer since 2006. We’ve still go four working days to go and there could be a ramp-up with last-minute applicants,” he said.
Spread betting firm ETX Capital said they had traded “about £100,000 of stock” on their grey market listing, while Shore Capital analyst Eamonn Flanagan expressed hope that public demand will push up Direct Line’s launch price: “There’s some good profits to be had and a very healthy level of income on this baby. That has to be of interest to private clients.”