RBS to float Direct Line insurance
ROYAL BANK of Scotland is sounding out retail stockbrokers about offering shares in Direct Line to the public when the part- nationalised bank floats its insurance business, said people with knowledge of the plan.
The unusual move – an echo of 1980s privatisations in Britain – would give individuals the chance to buy shares directly in what is set to be the biggest flotation of a British company in six years.
Few companies that have listed in London in recent times have offered shares directly to private investors, meaning small savers have to wait to buy them on the secondary market. Brokers say involving retail clients in initial public offerings can be more time-consuming and expensive than dealing exclusively with prospective institutional investors.
However, people involved in the Direct Line process said RBS was much more receptive to the idea – partly because the Direct Line brand is well-known among British consumers, but also because of the bank’s part-nationalised status.
One senior broker involved said: “The man and women in the street will certainly be given the chance to buy this deal. If it gets a good write-up in the press, your average pensioner or saver with a bit of money will probably want to buy.” – (The Financial Times Limited 2012)