Irish policyholders set for €70m Standard Life windfall

THOUSANDS of Irish policyholders are in line for a €70 million windfall following the decision of Standard Life in Britain to reject several bids and to seek a flotation on the London Stock Exchange.

Up to 95,000 Irish members of Standard Life stand to gain from the Initial Public Offering (IPO).

Overall, about half of the group’s membership is entitled to payments of €725-1,450 each from the biggest mutual player in the European market.

The other half are entitled to more than €1,450 each.

A spokeswoman for the company in Ireland said it was not in a position to quantify the final payment to the group’s Irish stakeholders. If the mid-point of €1,450 is taken as the average payment to Irish members, then the total pay out could be as high as €70m, she said.

However, she stressed that figure was just a guess and was not reliable.

However, a big payout is on the cards and it follows the mutual insurer’s rejection of an all-share merger proposal from an unidentified suitor, it said yesterday.

It vowed to press ahead with Britain’s biggest IPO for five years.

It confirmed it received a number of approaches, including requests to take a significant shareholding in the business, but had turned all of them down and to seek an IPO instead.

Standard Life had been seen as a possible target for a takeover before its expected market debut in July, but analysts have said high valuations in a sector fizzing with merger speculation could dampen deals.

Competition in the British life insurance market is tough, with most of the main players reporting a decline in the profitability of new policies last year as they were forced to cut prices to maintain market share.

Standard Life said it aimed to raise £1.1 billion (€1.5bn) in its flotation, giving a potential market value of £4.8bn (€6.9bn) to £5.5bn (€7.9bn).

That valuation is based on a likely price range of 240-290 pence (347-419 cent), which advisers said would have been the range had the shares been traded on 13 April.

That market value would make Standard Life the fifth largest British listed life insurer behind Aviva, Prudential, Old Mutual and Legal & General.

If its members approve the demutualisation and listing plan at a meeting on May 31, Standard Life would be London’s largest debut since telecoms firm Orange in 2001.

Three-quarters of voting members have to approve the plan for it to go through.