Canada shares to yield windfall

A FEW lucky Irish shareholders in Canada Life are in line for huge one-off pay-outs of up to €672,720 each, if the bid

Average payments will be much lower at just under €7,000, but it was reported yesterday that a handful of people will cash in to the tune of several hundred thousand euros.

Some 25,000 Irish people or institutions hold Canada Life shares out of a total of 190,000 shareholders. They will receive details this week of the $4.78 billion offer for the company by US firm Great West. The Canada Life board had previously rejected as inadequate a hostile bid by Toronto-based Manulife, but gave its approval to the Great West deal.

It is believed a number of Irish shareholders own around 10,000 shares in the assurance company, which means they would be in line for a windfall of €280,000.

The larger sums will be payable to those shareholders who received 24,000 shares in Canada Life after its 1999 demutualisation, provided they have not subsequently sold their holding.

Around 180,000 Irish people held policies with Canada Life when the group demutualised. Some 54,000 received shares. However, only around 25,000 Irish shareholders remain, most of them with a holding of around 250 shares.

They can take their windfall in cash or shares or a mixture of both if the deal gets the green light.

Shareholders will have until May 2 to return the offer documents to Canada Life and a vote will be taken on the deal at a special meeting on May 5.

Canada Life has no major institutional shareholders, leaving the decision on its future to ordinary investors.

If the takeover bid is successful, the new group will be Canada’s largest life assurance firm, overtaking SunLife.