Friends Provident Members Vote To Demutualize

June 7, 2001

An overwhelming 97 percent majority of the members of U.K. mutual insurer Friends Provident voted to become a public stock company as early as next month, ending 169 years as a mutual society.

The decision comes less than a week after the policyholders of Scottish Life approved a similar plan to demutualize. The shareholders of both companies stand to profit from the conversion.

Friends Provident’s worth as a public company is estimated to be between £3.7 (5.16 billion) and £4 billion ($5.58 billion). Its 1.7 million policyholders will receive an average allotment of 200 shares with a total minimum estimated value of $450 ($628), while “with profits” policyholders will receive an average payout of around £2000 ($2788).

Plans currently call for the initial public offering to be made July 9. The company expects the sale to raise almost $2 billion.

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