May 30, 2012 / 8:43 AM / in 6 years

RBS picks advisers for Direct Line IPO

LONDON (Reuters) - Royal Bank of Scotland (RBS.L) has picked UBS UBSN.VX to help with the listing of its Direct Line insurance arm this year, one of the biggest planned listings in London, people familiar with the matter said.

A flag flies over the former headquarters and registered office of the Royal Bank of Scotland (RBS) in Edinburgh, Scotland March 29, 2012. REUTERS/David Moir

RBS has said it wanted to list a minority stake in Direct Line in the fourth quarter.

The euro zone crisis and this month’s weak debut by Facebook (FB.O) have sapped investor confidence in new issues in Europe where there has been little activity this year. But European regulators have said RBS must sell a majority stake in the insurer by the end of 2013 as payback for Britain’s bailout of the bank during the financial crisis.

    UBS will be joint bookrunner for the initial public offering (IPO) alongside Goldman Sachs (GS.N) and Morgan Stanley (MS.N), which have been advising Direct Line on its options for some time. UBS is house broker to RBS.

    Direct Line was founded in 1985 and includes leading UK brands Direct Line and Churchill and operations in Germany and Italy and could be valued at near 3.2 billion pounds, analysts have estimated.

    RBS, 83 percent owned by the UK taxpayer, may update investors on the prospects of the IPO going ahead at its annual shareholder meeting in Edinburgh later on Wednesday.

    Reporting by Steve Slater and Victoria Howley. Editing by Jane Merriman

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