RPT-DEALTALK-RBS's mooted insurance sale could drag on
(Repeats Nov. 2 story to additional Reuters codes)
(For other Reuters dealtalks, please double click on [DEALTALK/]
* Asset size, tough markets seen delaying deal
* RBS insurance unit worth about 6 bln stg - analysts
* Price tag of 4-5 billion pounds "realistic" - banker
By Myles Neligan and Victoria Howley
LONDON, Nov 2 (Reuters) - Royal Bank of Scotland Group Plc's (RBS.L) prized insurance arm looks set to go back on sale just months after a previous selloff was abandoned, and getting top price could be even more difficult than last time. [ID:nL2281331]
The assets would attract plenty of interest if, as expected, Brussels forces its sale, yet the unit's sheer size and the tough market it operates in make a quick deal unlikely.
RBS's insurance businesses, including Britain's biggest motor insurer Direct Line, could be put on the block as early as Tuesday to win EU approval for billions in state aid the lender has received, people familiar with the matter have told Reuters. [ID:nLU18006]
An auction of the unit, which analysts value at about 6 billion pounds ($9.8 billion), would come just nine months after RBS pulled an earlier disposal attempt because it failed to attract an acceptable offer in the wake of the global financial crisis. [ID:nL5580388]
While market conditions have improved since then and the assets remain highly regarded, RBS might still struggle to achieve the price it wants due to a limited number of potential buyers.
"They are good assets, so they should be saleable, but the number of people who are really in the market for assets of that size is hard to say," said S&P Equity Research analyst Tony Silverman.
"For someone with no existing presence in the UK to get into what would normally be seen as one of the most competitive and mature markets in the world ... it doesn't automatically get to the top of the strategists' lists."
