Direct Line Insurance Share Discussion Threads

[jamielein] 11/10/2012 14:48

Putting the forced sale of RBS's stake aside, how much should this share be worth purely based on the company itself?

I've heard it's valued lower than Admiral and RSA on both book value and PE ratio. Is there a reason for this?

If it was a normal share with normal supply and demand, shouldn't it trade in line with those two companies?

Obviously if a fair value calculation puts this at 250p for example, then it's a good long term hold provided nothing else changes to impact that valuation.

I'd see the stock overhang as a good thing for long term investors as it's really a false supply of shares, and will keep prices low for investors to buy cheap stock for the long term.

Any thoughts?

[chinese investor] 11/10/2012 14:46

Looking Good !

[dr biotech] 11/10/2012 11:35

25000 investors at 5k each gives the 125m slice. Obviously thats not going to be a hugely accurate calculation but there probably won't be much to scale back. I was going to invest 20k here but went for 7.5 after all the negative press comment. Still it will hopefully pay for a firework party.

[spob] 11/10/2012 11:16

Investors secure £125 million slice of Direct Line shares in stock market debut


Holly Williams Thursday 11 October 2012

The Independent




Small investors secured a £125 million slice of Direct Line Group today as the insurer made its stock market debut in London's biggest flotation of the year.

The Churchill and Direct Line insurer drew a big response from retail investors, who were allotted 15 per cent of available shares in what is thought to be the strongest take-up among private investors for at least five years.

Shares were initially priced at 175p and rose nearly 2 per cent in conditional trading, valuing the Royal Bank of Scotland-owned group at around £2.8 billion.

The float raised £787 million for taxpayer-backed parent RBS, which is offloading Direct Line to appease European Union rules on state aid.

But Direct Line was priced at the lower end of City expectations in what was seen as a move to price shares "to go".

Retail investors now own around 4.5 per cent of the entire Direct Line Group after investing around £5,000 on average each. It is thought an estimated 25,000 retail investors applied for shares ahead of today's stock market listing.

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: "It clearly has captured the imagination of the retail investor.

"Obviously there haven't been many similar flotations in the past few years and the fact the shares were fairly well oversubscribed has underlined that."

RBS floated 30 per cent of Direct Line and will follow today's share sale with further tranches.

The state-owned bank 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 as part of conditions of its £45 billion bailout at the height of the financial crisis.

Paul Geddes, chief executive of Direct Line Group, said he was "delighted" with the level of demand from retail and institutional investors.

[zcaprd7] 11/10/2012 11:11

Royal Bank of Scotland, the taxpayer-owner bank, has priced its initial public offering of insurance unit Direct Line at 175p a share, potentially giving thousands of small investors the chance of a windfall.



Good luck to the staggers, but I think this is bottom draw SIPP stuff...

[dr biotech] 11/10/2012 10:08

I don't see that as being a big issue - or the competition review. I think the latter will end up being a fudge and may actually be beneficial as insurers would have to rely on premiums more than selling details (this is more likely to hurt admiral). Of course they are both "unknowns" which isn't great, but after a year of hopefully solid results I think RBS will be able to offload the rest easily.

Having said that, I doubt I will be a holder by then.

[spob] 11/10/2012 09:33

Its an interesting situation

[spob] 11/10/2012 09:20

Manipulation Notice

In connection with the offer of the above securities, the Stabilising Manager may over-allot the securities or effect transactions with a view to supporting the market price of the securities at a level higher than that which might otherwise prevail.

[dasv] 11/10/2012 08:52

Final Offer Statistics
Offer Price (per Ordinary Share) 175p
Number of Ordinary Shares in issue at the date of the Prospectus 1,500,000,000
Number of Ordinary Shares comprised in the Offer(1) 450,000,000
Percentage of the Company's issued share capital being offered in the Offer(1) 30.00%
Number of Ordinary Shares in issue at Admission 1,500,000,000
Maximum number of Ordinary Shares subject to the Over-allotment Option 67,500,000
Estimated gross proceeds, and proceeds net of expenses receivable by the Selling
Shareholder (assuming no exercise of the Over-allotment Option)(2) £787.5 million, £766.4 million
Estimated gross proceeds, and proceeds net of expenses, receivable by the Selling
Shareholder (assuming the Over-allotment Option is exercised in full)(3) £905.6 million, £882.1 million
Expected market capitalisation on Admission of the Company at the Offer Price(4) £2,625.0 million

[spob] 11/10/2012 08:41

you have been scaled back

[dr biotech] 11/10/2012 08:39

Its not available to trade on IGs standard platform. Assuming I have a full allocation, I have made 350.

Can't sell till next week though and of course the story may be different by then. I'm not wholly sure that was worth the effort.

[the bug] 11/10/2012 08:36

lets hope so

[spob] 11/10/2012 08:22

will these hit 200 today

whats the betting ?

[spob] 11/10/2012 08:21

wether or not unconditional means shorting will be possible I have yet to find out :)

[spob] 11/10/2012 08:18

unconditional dealing starts on Oct 16

[chinese investor] 11/10/2012 08:18

1950 - 999.25 = 950.75 * 65% = 618 / 175 = 353
927 * (183 - 175) - 74 pounds
Wow !

[ewads] 11/10/2012 08:15

Float at 1.75 .... now 1.81....sell?

[chinese investor] 11/10/2012 08:07

The share offer proved popular and as a result The Royal Bank of Scotland Group scaled back all applications. Each applicant been allocated the first £999.25 (571 shares) of their application in full and any demand above that at a rate of 65%, rounded down to a whole number of shares and subject to a maximum allocation of £99,998.50 (57,142 shares).

[spob] 11/10/2012 08:04

charts are working now

[spob] 11/10/2012 08:03

as you say charts will not update until advfn gets up to speed on the new float

interesting that no one to hold more than 3% at float apart from rbs

[spob] 11/10/2012 07:34

no position jonwig

just watching

good luck to anyone making a quick turn on these, I'm more interested in accessing the long term situation here

[jonwig] 11/10/2012 07:27

Spob - what's this, then, a thread to bash Direct Line from?

By the way, I think ADVFN has 'DLG' left over from a company called Delling Group which went bust in 2009.
Until they sort it out you'll have some misinformation in your header.

[davidgsduk] 11/10/2012 07:26

good luck everyone with this one look like another good company