State-owned lender Royal Bank of Scotland (RBS) revealed that the flotation of its insurance arm, Direct Line Group, will be priced somewhere between 160p and 195p per share.
The announcement came on the day the Office of Fair Trading called on the Competition Commission to look into the UK car insurance market to see whether insurance companies are doing right by motorists.
The maximum number of shares to be floated will be 575m shares, but the actual number is expected to be somewhere between 375m and 500m, which represent between one-quarter and one-third of the existing share capital of Direct Line.
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Final pricing is currently expected to be announced on or around October 11th, 2012, with conditional dealings in the shares on the London Stock Exchange beginning the same day.
RBS has been obliged to offload its lucrative insurance arm, which includes the Churchill brand, as a condition of it receiving its £45.5bn bail-out from the UK government.
Direct Line was launched more than 25 years ago as a pioneer of direct motor insurance and it has grown to become the market leader in UK personal lines insurance, despite not featuring on price comparison web sites.
RBS will retain a stake in the company after it has been floated off, but must offload its entire interest by the end of 2014.
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