Spain's Bankinter has asked Royal Bank of Scotland (RBS) about a buyout of their insurance joint venture, in a move that values the business at up to £700m.

Linea Directa is for sale as part of the £7 billion auction of RBS Insurance. The business, which controls 5% of the Spanish motor-insurance market, is a 50-50 joint venture between Bankinter and RBS.

Bankinter is understood to have approached RBS’s advisers at Goldman Sachs last week with an offer to buy out the 50% stake that it does not already own.

Goldman and Merrill Lynch will launch the auction of RBS Insurance this week, when they send an information memorandum to all potential bidders.

The move comes amid speculation that prospective buyers are attempting to form consortiums to bid for the group, which includes Churchill, Direct Line and Privilege.

Italy’s Generali has declared an interest, and Warren Buffett’s Berkshire Hathaway is also believed to be a contender. Several private-equity groups are also looking at the possibility of a bid.

It is thought that RBS would prefer to sell the business as a complete unit. However, many potential buyers are interested in the large consumer brands such as Direct Line and Churchill but are less keen on NIG, a business that sells through intermediaries. NIG is thought to have made losses for several years.

The bankers handling the sale would like to hive off NIG to a private-equity house, potentially at a knockdown price, to simplify the bidding for the rest of the group.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive