Standard Life members decide on float

Standard Life members decide on float

	Published : Wed, 31 May 2006 12:35 By : James Rowe Print this Story

EDINBURGH: Members of Britain’s mutual insurer Standard Life voted Wednesday, deciding to go ahead with an initial public offering (IPO), which is slated to be the country's largest in five years, valuing the company around 5 billion pounds.

According to indications, a clear majority of voting members and policyholders endorsed the plan, which was also be a vote of confidence in the management team of chief executive Sandy Crombie, who was in 2004 told to quit after he unveiled the IPO plan.

In a bid to garner support for the IPO plan, Standard Life disclosed that its 2004 strategic review was working as it continued to focus on profitable products. The first quarter results showed that the firm's sales totaled 2.64 billion pounds compared with 9.37 billion for the entire 2005. The company also said its worldwide sales had gone up 7 per cent at 342 million pounds in the quarter.

The firm said contribution of new business to its profits in the first quarter of 2006 almost matched the level for all of 2005. Its quarterly worldwide new business profit stood at 30 million pounds, compared with 33 million for all of last year, the company said.

After the 2004 review, Standard Life had said it would move out of some pension products, cut commission to agents and slash payouts on its policies to cut costs.

At least one million voting members are expected to record their view on the proposal Wednesday. Standard Life has some 2.4 million voting members. If the plan is approved, the company plans to raise 1.1 billion pounds. The prospectus and other details are expected in June with a July debut planned. The company has said it will require the backing of at least 75 per cent of members in the vote.

The firm's advisers have estimated that the shares are likely to be worth between 2.40 pounds and 2.90 pounds-a-share. This may bring amounts between 490 pounds and 1,000 pounds to eligible members, while several City institutions and wealthy members would receive six-figure pay-outs.

It is seen as a quirk of fate. Six years ago, some one million of its policyholders had voted (54 per cent) against a stock sale after the company spent about 10 million pounds on a campaign against it. The proposal was brought by Australian financier Fred Woollard, who estimated the mutual was worth about 15 billion pounds in 2000.

The company then suffered investment losses after selling 7.5 billion pounds of stocks in 2004 to meet stricter rules from the Financial Services Authority.