LONDON--Two private equity consortia are planning to bid for
Direct Line, owned by Royal Bank of Scotland Group PLC (RBS.LN), in
a move that would scupper a planned flotation of the giant insurer
later this year, The Sunday Times reported, citing unnamed
sources.
U.S. buyout giants Blackstone Group (BX) and Bain Capital
(BCI.XX) are assembling a pre-emptive bid due at the end of the
month that would derail the flotation, which is seen in
September.
Another group, comprising Kohlberg Kravis Roberts, Apax, and BC
Partners, is also putting together a rival offer, the newspaper
added.
Direct Line is the U.K.'s biggest car insurer by number of
policies, and a leading provider of home insurance. Its brands
include Churchill and Green Flag, the car breakdown service, the
newspaper said.
European regulators ordered RBS to sell its insurance arm as a
condition of a government bailout four years ago. RBS, which is 84%
owned by the British taxpayer, received GBP45 billion to save it
from collapse, the newspaper said.
The disposal will help restore RBS's finances, which need to be
strengthened before the government can sell shares, it added.
RBS put Direct Line up for sale in 2008 after several
unsolicited approaches, it said, but bidders fell short of the
asking price.
RBS has appointed 11 investment banks to handle the offer, under
which it is expected to sell 30% of the company to investors.
The roster of advisers is led by Goldman Sachs, Morgan Stanley
and UBS, with support from Bank of AmericaMerrill Lynch, BNP
Paribas, Citi, Commerzbank, HSBC, Investec, KBW and Royal Bank of
Canada.
Blackstone, Bain and KKR were immediately unavailable for
comment. Apax declined to comment.
Newspaper Web site: http://www.timesonline.co.uk
-London Bureau, Dow Jones Newswires; +44 (0)20 7842 9320