Taxpayer-backed Royal Bank of Scotland today said “oh yes” to plans to spin off its Churchill and Direct Line insurance arm in a highly-anticipated stock market flotation.
The 80% state-owned lender must sell its interest in Direct Line Group, which also includes the Green Flag and Privilege brands, under a European-imposed condition of its £45bn (€56.2bn) bailout received in 2009.
Around 25% or more of Direct Line Group, whose Churchill brand is represented by the popular nodding dog, will be offered in the initial share sale with additional tranches to follow.
RBS must sell a majority stake in Direct Line Group by the end of next year, and divest of the entire company by the end of 2014.
Direct Line Group, which has 4.2m personal motor policies and 4.3m home insurer policies in force, should be worth around £3bn (€3.74bn), according to analysts.