standard life windfalls £250 fixed payment ??

EdInvestor

And in that case (harking back) the members would be asked to vote for a cash sum (or at least an element, of?) I assume?

Yes the windfall would then be in cash.

This question of a predator may be one reason the company is talking about such low amounts for the basic windfall at the moment.They may be trying (on the advice of their investment banks) to try to suggest a buyer could get away with paying the members quite a low amount, and thus pick up a bargain. If there are any buyers out there, they may be hoping this would flush them out.

Members need to keep an eye on what other insurers are worth, because valuing a company always involves comparing it with its peers. The figure of 4-6bn keeps being mentioned but this is way out of date. As the Scotsman says there have been several reratings of the insurers since then.

At the moment Friends Provident is worth around 4bn pounds. But FP is a piddling life company compared with Standard.To give you an idea, our Canadian branch (you mean you didn't know we had a Canadian branch?:idea: ) is worth almost half the total value of FP on its own. Our company's annual sales are three times as big as FP's.

Legal and General, a bigger life company, is currently worth 8bn pounds, double the figure the papers keep quoting for Standard. That sounds a lot more realistic comparison to me.

ReportInvestor

The Times

More downbeat estimates of windfall values. There need to be more questions asked of why this is.

And the Chairman is going to quit after Standard floats, which one analyst sees as unhelpful.

"The Standard Life flotation, which will trigger windfalls of between £500 and £1,000 for 2.4 million policyholders, is tipped to value the company at about £5 billion."

Something's not right. Either the company is in worse shape than we imagined or persistent misinformation is being allowed to go uncorrected, for whatever reason.

ReportInvestor

Link to Investors' Association letter in the FT highlighting the diminishing value of windfalls and concerns over corporate governance over the years

"...For long-standing members, who have endured significant capital losses largely brought about by a failed equity investment strategy and other examples of gross mismanagement over the last five years, the upcoming flotation provides a final opportunity to recover some of those losses.

But even here the company's market value appears inexplicably low and is shrinking on a weekly basis, with recent windfall estimates being pitifully low....."

ReportInvestor

Telegraph

Good news for Standard Life with profit investors.

Aviva's £16.8bn / £7 a share bid for Prudential should perk up insurers' share price valuations just in time for the Standard Life float .

Meanwhile, back at the ranch, Standard dithers and dithers about producing its preliminary results for 2005

Everyone else's profits are shooting up.

ReportInvestor

Good news from the Sunday Times

Standard is not planning to raise more than £1.2 billion in capital from the City when it floats.

That will help the share price in two ways:

It will reassure analysts who might be worried about Standard blowing away a lorryload of cash, like they did in the past.

It will mean more demand from the City e.g. tracker funds for Standard Life shares in the after-market.

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Ozone

I am a 20 year + with profits policy holder with Standard life. I have lost out big time in the past. I have been told I can expect shares or money if the vote is yes to DM. Im also told If I choose shares and keep them for a while, there may be some sort of loyalty bonus and/or an option to purchase further shares at a preferential rate. Here are my questions for you guys - any help or pointers would be very, very much appreciated.
1. should I ask for money or shares?
2. If I take shares how long after flotation should I retain them for reasonably?
3. Does anyone know what has happened to share prices in other similar organisations that have floated in the past and is there a pattern of any kind?
4. Why is SL keen to offer bonuses & preferential share prices to encourage me to choose shares and hang onto them?
Thanks in advance for any help you might be able to offer.
Ozone.

EdInvestor

Hi Ozone.

Only shares are on offer.Once the shares are listed in early July, you can sell them for cash or keep them.

If you keep them for a year, you will get some bonus shares.

There have only been a couple of mutual life companies listing in the past so there is no real pattern.It is thought Standard life may be a takeover candidate after the float and thus the share price may rise (but this is speculation).

Standard would like its small shareholders (us) not to sell our shares immediately, so it is offering us incentives to hold on.This is because it doesn't want to be gobbled up by a bigger company immediately.

Ozone

Thanks ED!

RufusA

Ozone wrote:

3. Does anyone know what has happened to share prices in other similar organisations that have floated in the past and is there a pattern of any kind?

FWIW I took Friends Provident Shares (and brought extra) when they demutualised in 2001. The share price (nearly 5 years later) hasn't once recovered to what it was very shortly after demutualisation - currently trading at 20% below issue price. I would have been *much* better off selling them on the first day, and using the money to buy into a FTSE 250 tracker!

There have been various rumours of consolidation/takeover, etc. but continued hard regulation from the Government, and various insurance problems have had a big impact on their bottom line.

NU (floated 9 years ago) has over that period grown around 3% per year, BUT all of that growth has been from the first 4 years i.e. it's just about back to the same price it was 5 years ago.

Considering Standard Life's poor management I doubt the share price will outperform the FTSE 250 (or 100). There may be a small blip at the beginning if the company is undervalued, and as all the tracker funds buy in to the shares. But is the short to medium term I wouldn't be confident.

The 5% free shares after a year may be worth hanging on for, BUT it will effect the share price so overall value of holding probably won't change! If you were confident price would remain firm for a year might be worth taking the 5% and selling instantly (before price falls in response to other sellers).

Personally I'm going to sell on or just after demutualisation day, take the money and invest elsewhere. I'm exposed enough to Financial Sector shares through Friends Provident.

YMMV - Rufus.

Ozone

Thak you very much. You have been a great help and made my a little easier.
Best regards,
Ozone.