STANDARD LIFE BOARD BACKS 2006 DEMUTUALISATION

UK-based assurer Standard Life has set out plans to relinquish its status as a mutual and float on the stockmarket in 2006, only four years after successfully holding off a demutualisation campaign led by Australian carpetbagger Fred Woollard. Announcing the u-turn yesterday in tandem with proposals to cut over 1,000 jobs in an effort to cut its cost base by a fifth, Standard Life CEO Iain Lumsden said that mutuality had served the assurer well, “but the world in which we operate has changed. Raising capital by way of a demutualisation is in the best interests of the company and its policyholders”. To push ahead with the proposed flotation, Standard Life must still win 75% approval when it puts its plans to a vote in 2006, though the board is likely to face anger from policyholders over its change of heart in a matter of days, with its annual meeting due next Tuesday. Analysts have estimated Standard Life’s potential stock market value at between £5bn and £7bn, although policyholders would receive less than that amount since the assurer is probably looking to raise £2bn in new capital.