Friends Provident to announce 'windfall' sums

Friends Provident policy-holders will find out today what their flotation windfalls will be worth when the life insurance group…

Friends Provident policy-holders will find out today what their flotation windfalls will be worth when the life insurance group announces its share price.

The group's 1.7 million members have each been given 200 free shares, with some members getting additional allocations depending on the size of their policies and how long they have held them.

Merrill Lynch, the investment bank advising the group, has set an indicative range of between 210p to 270p for the society's shares when it floats on the London Stock Exchange on Monday.

But turbulent stock markets, and a warning from Friends Provident that profits for the year are likely to be down, has led analysts to predict they will be priced at the lower end of the range.

READ MORE

Most analysts are expecting the shares to enter the market at between 210p and 225p, with some suggesting they could be priced slightly higher at 230p.

Members' windfalls could be worth between £420 and £11,000 depending on the size of their allocations and the price of the shares.

Policyholders have also been given the option to buy extra shares at a discount as part of Friends Provident's move to raise £1.5 billion through the flotation.

The group is likely to be valued at between £3.3 billion and £4.3 billion, which will see it go straight into the Footsie index of 100 leading blue-chip shares.

More than 97 per cent of members backed the move to demutualise the group, which was founded in 1832 to provide life insurance for Quakers.

PA