RBS could announce Direct Line flotation this week
Government-owned lender Royal Bank of Scotland (RBS) could start the process of spinning off its Direct Line Insurance Group by the end of the week, reports indicate.
Government-owned lender Royal Bank of Scotland (RBS) could start the process of spinning off its Direct Line Insurance Group by the end of the week, reports indicate.
Quoting persons close to the discussions, news agency Bloomberg claims RBS is poised to sell around a quarter of Direct Line through a stock market flotation to generate around £1.0bn, although no decision has yet been made about either timing or the valuation of the flotation.
A number of private equity firms have expressed an interest in buying up shares in the company, although as yet none have initiated formal discussions because of disagreements over price.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The bank was ordered by the European Union to sell the insurance unit after the bank received state aid.
Earlier this month Direct Line announced plans to cut 900 jobs in a bid to cut costs. Direct Line currently employs 15,000 people and owns brands such as Churchill and Green Flag. More than half of the jobs will go at Direct Line's site in Stockton-on-Tees, which is to be closed.
Direct Line has launched a series of initiatives aimed at saving £100m by the end of 2014.
The flotation is expected to give a boost to the flagging new issues market, and throw a lifeline to struggling brokerages. According to data compiled by Bloomberg, London listed companies have raised just $1.4bn so far this year, compared with $15.6bn in 2011, which was boosted by Glencore's offering which generated $10bn.
RBS shares rose 2.33% to 250.20p by 13:29.
NR
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
-
Michelin Key Hotels 2025: the top destinations in the world
The Michelin Keys have been awarded to spectacular hotels across the world. From Marlon Brando's private resort in Polynesia to a Bvlgari hotel in Tokyo, we look at some of the most extraordinary stays in 2025
-
MoneyWeek news quiz: How much could you get in car finance compensation?
The car finance scandal, inheritance tax, and house prices all made headlines over the past few days. Test your knowledge while reviewing this week’s top stories with MoneyWeek’s news quiz