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RBS Direct Line Insurance stock downwards today

RBS Direct Line Insurance stock downward today : The shares of Royal Bank of Scotland  (LSE: RBS  ) (NYSE: RBS  )  slipped 1 pence to 305 pence during early on London merchandise this morn afterwards the banking company announced belatedly final nighttime that it would sell to a greater extent than shares inwards Direct Line Insurance  (LSE: DLG  ) .

RBS confirmed it would offering 229.4 i one m thousand shares -- equivalent to 15.3% of Direct Line's portion working capital missive of the alphabet -- to institutions via an 'accelerated bookbuild' process.


Direct Line's shares brutal four pence, or 2%, to 206 pence during early on trading, indicating RBS could heighten nigh 470 i one m thousand pounds from the disposal. The sale would cause got RBS's remaining stake inwards Direct Line to only below 50%.

RBS said the procedure could involve selling a farther 22.9 i one m thousand shares depending on sufficient institutional demand.

RBS is essentially a forced seller of Direct Line, having agreed to dispose of the insurer equally utilisation of the commitment made to the European Commission next the bank's taxpayer-funded bailout.

RBS sold 35% of Direct Line at 175 pence a portion final yr via a flotation in addition to must sell the residuum earlier the halt of 2014.

Within its annual results final month, Direct Line declared a initiatory viii pence per portion dividend in addition to implied the payout could cause got been 12 pence per portion had the draw of piece of job organisation operated separately from RBS throughout all of 2012.

Direct Line's results likewise showed underlying cyberspace earned premiums falling 5% to 3.7 billion pounds in addition to underlying operating profits advancing 9% to 461 i one m thousand pounds.

Based on those results, Direct Line is valued at less than 10 times profits in addition to offers a possible 5.8% dividend income.

Of course, whether that 5.8% income, RBS's determination to sell to a greater extent than shares -- equally good equally the full general outlook for the insurance industry -- truly combine to brand Direct Line a purchase remains your decision.

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Indeed, the bluish fleck inwards enquiry offers a 5.7% income, mightiness endure worth 850 pence versus closed to 700 pence instantly -- in addition to has only been declared the "Motley Fool's Top Income Stock For 2013!"

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