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Last Updated: Wednesday, 31 May 2006, 13:04 GMT 14:04 UK
Standard members vote for float
The view from Standard Life's office in Edinburgh
Members have changed the direction of Standard Life's history
Members of insurance firm Standard Life have backed demutualisation plans with 98% voting in favour of the move.

The result was announced at a special meeting of members in Edinburgh.

It means that, subject to court approval, the company will float itself on the stock market and become owned by its shareholders.

Windfall shares worth an estimated minimum of 500 will be offered to about 2.4 million investors and the company will raise an extra 1bn.

More than 1.5 million members voted in favour of the change.

Overwhelming vote

Standard Life needed a 75% yes vote to press ahead with its plans, but in the event the yes vote was far larger than necessary.

We believe it will provide significantly more opportunity for the development of Standard Life and is in the best interests of members, customers and policy holders
Sir Brian Stewart, chairman, Standard Life

The flotation - which is planned for July - will see eligible investors receiving shares with an estimated average value of 1,700.

It will bring to an end the mutually-owned status of the investment and insurance group which has lasted for 80 years.

Only 400 members were present at the special meeting in Edinburgh, with the vast majority of those voting having cast their votes by post.

The result saw 1,545,314 voting for demutualisation, with 32,474 against.

Standard Life chairman Sir Brian Stewart was delighted.

"I can't describe just how successful it's been, I would like to thank everyone who has been involved," he said.

"We believe it will provide significantly more opportunity for the development of Standard Life and is in the best interests of members, customers and policy holders."

When the flotation is completed the insurer is expected to have a stock market value of between 4.8bn and 5.5bn.

This will make it the fifth biggest insurance company on the UK stock market.

About-turn

The decision to become a company owned by shareholders is a sharp about-turn for Standard Life.

PROPOSED FLOTATION TIMETABLE
May 31: Members vote on proposed demutualisation. Outcome of vote published
June: Court of Session in Scotland to hear appeal for proposed demutualisation
June: Shareholder prospectus published
July: Standard Life floats on stock market.

Twice in recent years it has opposed calls to demutualise and give windfalls to its members.

That all changed after the stock market fell between 2000 and 2003. This severely undermined the value of Standard Life's investments which had remained heavily overweight in shares.

In addition, the company saw declining sales of investment polices, due in part to the legacy of the industry-wide scandal over the mis-selling of endowments.

As a result, the insurer's directors came to the conclusion that it had to find new ways to raise money - and going to the stock market was the only method available.




BBC NEWS: VIDEO AND AUDIO
Members react to plans for demutualisation



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