More windfalls in store

By THIS IS MONEY
Updated:

 

About 76,000 British investors are set to receive windfall bonuses as Canada Life today pushed ahead with its planned demutualisation.

The company has won regulatory approval to send out information packs to its 388,000 investors around the world about its intended demutualisation.

If the company's investors back the plan, all with-profit policyholders will receive 100 shares worth around £850. Customers with an endowment, pension or life insurance policies will receive a windfall. However, customers with Peps and Tessas will receive nothing.

Further windfalls will be calculated depending on the size and the length of time a with-profits customer has held their policy. Eligible customers will be asked in the information packs whether they want to keep their shares or sell them immediately.

The shares will be floated in November on the Toronto and Montreal stock exchanges.

Customers wanting to sell their shares immediately will receive cheques in the post.

If the demutualisation is approved shares will be floated and customers will receive their payments in November.

It is understood that at least 66% of policyholders must vote in favour of the demutualisation for the result to be valid.

Voting packs are expected to drop through customers' doors at the end of the month.

Ian Gilmour, vice-president in charge of Canada Life's UK operation, said: 'The board of Canada Life unanimously recommend this proposal, but ultimately it's up to the policyholders.'

The flotation has valued the company at between £1 billion and £1.6 billion.

The decision by the company to float was announced at its annual meeting in April last year while customers will receive their payout in August.

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