THE 150,000 Irish policyholders who qualify for free Norwich Union shares seem set for a bigger-than-expected windfall when it begins trading next month.
Analysts, who initially indicated that the shares would be worth 220p-265p, are now taking a more optimistic view, with some suggesting they could begin trading at up to 350p on June 16th, boosting the overall cash value to shareholders.
Details of individual share entitlements and of the discounts available to those who wish to subscribe for additional shares, will be sent to policyholders today.
The company has already indicated that investors holding with-profits policies will receive 300 free shares, plus a number of additional shares based on the size of their investment. Based on guide prices issued by Norwich Union's brokers in February, these policy-holders stood to gain about £800 from the flotation.
Financial stocks have, however, risen sharply in value since that valuation and Norwich Union's share price will, according to the analysts, also be higher than previously expected, bringing with-profits policyholders gains closer to around £1,000.
Investors with non-profit policies, such as mortgage protection, will get 150 free shares, which could now be worth up to £450.
The revised forecasts reflect the strong performance of life assurance stocks on the London market, and are also based on the good performance of other newly floated financial stocks.
The recently converted British building society, the Alliance and Leicester traded well above market forecasts when it came to the London market and the shares have continued to perform strongly.
Norwich Union's shareholders will be able to subscribe for a minimum of £400 and a maximum of £100,000 worth of additional shares at the discounted thrice.
Meanwhile, it has been reported that the Australian insurance giant, AMP, is preparing to launch a takeover bid for Norwich Union after the flotation. If this happens, some analysts expect the shares could go higher, presenting further opportunities for investors.
Norwich Union has a helpline for Irish policyholders at 1850 334444.
