Standard Life egm backs deal that gives £1.7bn cash payout to shareholders

Standard Life Aberdeen's sale of its insurance business to Phoenix Group has been overwhelming approved by shareholders after its chairman pledged it would help transform the company into one of the world's leading investment businesses.

More than 99 per cent of shareholders of Standard Life Aberdeen, which was formed last year through the merger of insurer Standard Life and fund manager Aberdeen Asset Management, backed each of the three resolutions relating to the sale.

The sale will trigger a “return of value” of about £1.75 billion to the group’s shareholders – including just under 57,000 in Ireland.

Gerry Grimstone, chairman of the group's board, said the sale to Phoenix represented a "decisive break from our past as an insurer" and supported the company's "ambitions of becoming a world-class investment company".

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The chairman also reassured shareholders that Standard Life Aberdeen was well-prepared for Brexit. “Everything we need to do [for Brexit] will be done by the required date,” he said.

Dublin

Mr Grimstone added that Standard Life Aberdeen has had to submit paperwork “as big as I am” to regulators as it attempts to prepare for the UK’s exit from the EU and warned that functions that were once carried out in Edinburgh or London will now be done in Luxembourg and Dublin.

He said that 400 people have left the the company since Standard Life took over Aberdeen last August.

The chairman added the £3.2 billion Phoenix deal would close by the third quarter.

At that stage the company has committed to return £1 billion to shareholders in a share consolidation exercise. This will involve the issue and subsequent redemption of new “B” shares in the group.

Not a windfall

The company says the value of the exercise for shareholders will be a minimum of 33.4 pence sterling for every Standard Life Aberdeen share currently held.

The return of value is not a windfall as the company is effectively buying back part of investors' existing holding. Any gain for shareholders on the original purchase price of their shares will be considered under capital gains tax rules.

Standard Life Aberdeen will subsequently spend a further £750 million buying the consolidated shares in the marketplace. – Copyright The Financial Times Limited 2018