Royal Bank of Scotland Group Plc is seeking as much as £630 million ($1.009 billion) from its third sale of a stake in Direct Line Insurance Group Plc, the U.K.’s biggest home and car insurer.
RBS will offer 272.7 million shares to institutional investors with the option to sell 27.3 million more, for a total of 20 percent of Direct Line, the Edinburgh-based lender said in a statement yesterday. The shares were offered in a range of 208 pence to 210 pence [$3.34 to $3.37] apiece, and RBS had demand for all of the stock, said two people with knowledge of the matter who asked not to be identified because the details are private.
Direct Line rose 0.1 percent to 218 pence[$3.49] in London yesterday. RBS currently owns about 48.5 percent of the insurer.
RBS has to sell the insurer to comply with European Union rules after receiving a £45.5 billion [$72.93 billion] bailout in 2008 and 2009. Direct Line, which sold shares to the public in October, is cutting costs and seeking to sell more profitable policies amid falling premiums in the U.K. and lower returns on investments amid record-low interest rates.
Issuers in Europe, the Middle East and Africa have raised about $74 billion in additional share sales this year, compared with about $37 billion in the same period in 2012, according to data compiled by Bloomberg.
The U.K. government sold 4.28 billion shares for £3.2 billion [$5.13 billion] in Lloyds Banking Group Plc this week, in the largest accelerated sale of secondary shares since 2009.
Goldman Sachs Group Inc., Morgan Stanley, Royal Bank of Canada and UBS AG are managing the Direct Line sale, which started after the end of trading in London yesterday.
Editors: Jon Menon, Mohammed Hadi