Direct Line IPO to be priced around middle of range

LONDON, Oct 10 (Reuters) - Royal Bank of Scotlandwill fix a price on Thursday for the stock market listing ofinsurer Direct Line at around the middle of the range originallyset, market sources and a source close to the transaction toldReuters.

The initial public offering is expected to be priced at 175pence per share, valuing the business at 2.6 billion pounds($4.2 billion), sources said late on Wednesday. One source closeto the transaction said the final figure had yet to be set.

RBS is selling Direct Line in return for winning approvalfrom European Union regulators for a bailout by Britain duringthe 2008 financial crisis that left it 82 percent state-owned.

The price is at the midpoint of the 160-195 pence range setby the British bank when it launched the initial public offering(IPO) on Sept. 28.

RBS has been under pressure to secure a good price for thebusiness, with British taxpayers currently sitting on a loss of21.5 billion pounds after Britain pumped in 45 billion to rescuethe bank.

($1 = 0.6242 British pounds)

(Reporting by Matt Scuffham; Editing by M.D. Golan)


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