(December 15 – 12:35 ET) – Eligible policyholders of the Sun Life Assurance Company of Canada have voted overwhelmingly in favour of the Company’s plans to demutualize. Sun Life of Canada expects to complete its demutualization and initial public offering in March of 2000.
The demutualization vote was conducted at a Special Meeting of eligible policyholders today at Roy Thomson Hall in Toronto. Just over one million policyholders were eligible to vote in person or by proxy. Some 450,285 votes, or more than 42.5% of total eligible votes were cast at today’s meeting. Of these, approximately 441,378 or 98% cast ballots in favour of the Company’s plan to convert to a publicly-traded stock company.
“This is an historic moment for the Company and its policyholders,” Donald Stewart, Chairman and Chief Executive Officer, said to those attending the Special Meeting. “Today’s outcome signals confidence in the Company’s potential to grow and compete in the financial services industry. The conversion into a publicly traded company will provide Sun Life of Canada with enhanced access to capital and increased flexibility while eligible
policyholders will benefit by receiving the entire value of the Company.”
Under demutualization, eligible policyholders — principally in Canada, the United States, the United Kingdom, the Philippines and Hong Kong will be allocated shares in a new holding company called Sun Life Financial Services of Canada Inc.
Following today’s vote, Sun Life of Canada will seek final regulatory approval for demutualization from Canada’s Minister of Finance. On December 6, 1999, Sun Life of Canada received approval from the Michigan Commissioner of Insurance.
The marketing of the Initial Public Offering of the shares of the new holding company is planned for March of 2000. Sun Life of Canada’s demutualization and Initial Public Offering (IPO) are targeted for completion in March of 2000. The shares in the new holding company are intended to be listed on the Toronto, New York, London and Philippine stock exchanges.
The number of shares allocated to each eligible policyholder will vary widely. The minimum allocation is 75 shares, while the average allocation is 378 shares. Policyholders will be sent a “Choices Guide” in January, which will set out the options they have with respect to holding their shares or selling them for cash. Due to securities laws and administrative concerns in jurisdictions where Sun Life of Canada has very few eligible policyholders, policyholders resident in those jurisdictions will have their shares sold on their behalf in the IPO. In some very limited cases, eligible policyholders will receive policy credits.
Based on a total of approximately 400 million shares being issued on demutualization, the estimated IPO price, as at September 24, 1999, would have ranged from Can.$14.00 to $21.00. This is an estimate only and not a prediction of what price the shares will be in the future. Furthermore, the IPO is not expected to be completed before March of 2000, several months after this estimate was made. The actual prices of the shares at the time of the IPO or afterwards could be higher or lower than the estimate at September 24, 1999.
-IE Staff