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Business News

RBS sheds 20 per cent of Direct Line in £800m sale


Royal Bank of Scotland last night sold 20 per cent of Direct Line in the second major financial share placing in London this week.

The bank first floated 30 per cent of the insurance group at 175p, valuing it at £2.63bn, last October, but the insurance company has since performed strongly.

The shares closed at 218p last night, making the stake sold off worth close to £500m, although such institutional book builds require some level of discount.

The Government used a similar mechanism to sell 6 per cent of Lloyds, which netted £3.2bn for the taxpayer on Monday night.

RBS has been forced to spin off its insurance businesses to satisfy EU demands over the state aid injected into the bank to keep it afloat.