Royal Bank of Scotland(RBS) said it had priced Direct Line at 175p a share, valuing the insurance firm at over 2.6 billion pounds.
The offer comprises 450m existing shares, representing 30 per cent of the 1.5bn total, raising RBS £787m.
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
Following admission, the bank will continue to hold 65.3% of the total shares in Direct Line, which owns the Churchill and Privilege brands as well as the breakdown service Green Flag.
RBS Group Finance Director, Bruce Van Saun, said the initial public offering was an important milestone in the bank's restructuring plan.
"We believe Direct Line is on the path to a bright future," he said.
RBS, which is 82% owned by the UK taxpayer, is being forced to sell Direct Line by the end of 2014 under EU state aid rules after the government was forced to give it a £45bn bailout in 2008.
-
Zoopla: House sales fall for first time in two years as buyers wait for Autumn BudgetThe average price of a house in September was £270,000, down £1,000 from August as the housing market’s Christmas slowdown came early, Zoopla says
-
Number of high-earning women jumps 12% – how to convert income into pensionsMore women than ever are paying the highest rate of tax as record numbers succeed in high paying professional roles. But their pension saving still needs to catch up
