Direct Line makes largest London IPO of year priced at 175p

The insurance arm of Royal Bank of Scotland begins trading today in the largest London listing of 2012.

Shares in Direct Line will come to market priced at 175p each, valuing the company at £2.6bn. The offer comprises 450m existing shares, representing 30% of the 1.5bn total, and should raise £787m for RBS. RBS had previously said it would float the firm at between 160p and 195p a share. RBS has been compelled to sell the subsidiary as a condition of the £45bn it received in bailout cash from the UK government in 2009 following the financial crisis. The bank must sell a majority stake in the group by the end of next year and it all by the end of 2014. Direct Line is 25 years old, and...