The 900,000 savers and borrowers who qualify for the handout, the last planned by a society this year, have just been sent details and have until 26 September to tell the former society what they want to do with their shares.
Qualifying customers are each being given the same 500 shares, regardless of their balances, although around 100,000 mortgage borrowers who also have Northern Rock savings accounts will get two windfalls, a handout that could be worth as much as pounds 4,000.
Stockbrokers are estimating the opening price at up to pounds 4 a share, although a more likely opening level may be around pounds 3.60, putting a value of pounds 1,800 on the handout. But even this may prove a good price to sell at, especially if the stock market should suffer a setback thereafter.
Jeremy Batstone, head of research at NatWest Stockbrokers, says: "The higher the opening price, the better it is to sell." Northern Rock shares could follow investors' experience with the Woolwich in falling soon after they join the stock market. Mr Batstone says Northern Rock could prove "a bit dead in the water" and 260p to 300p might be a "more appropriate" price for the shares.
On this view, shareholders who hang on could miss out on up to pounds 500 or more of potential profits and could face a long wait for the shares to get back up to the opening level.
Windfall recipients have been given a deadline of 26 September to tell the society what they want to do with the shares by returning the appropriate form sent out in the recent mailshot. The choices being given by Northern Rock are to sell through the former society's Initial Share Sale Facility, or opt to keep the shares for now, with or without a share certificate.
The Initial Share Sale Facility is a mass auction arranged by Northern Rock for big City investors due to be held on 30 September though, unlike previous handouts, the society is charging pounds 10 for this service. In the past the auction route has given some windfall recipients a worse deal than if they sold the shares themselves, although Northern Rock hopes to avoid this problem by probably having just a single auction, rather than giving an average price from a series of auctions over several days.
People who want more of an idea of what price their shares are sold at should opt to keep the shares for now. Assuming they meet the 26 September deadline, they should still have their share certificates in time to sell from 1 October, either using the society's own postal share dealing service, or, if they take a share certificate, through any stockbroker. Northern Rock's own share dealing service will cost pounds 10, or pounds 13 if you take a share certificate, which is fairly cheap.
But it only operates by post, so the price you get will be that when your selling instruction is received in the post. To sell instantly at or near a known price, shareholders should opt for a certificate for now, and then use a stockbroker who will take sales over the phone.
Opting for a share certificate will give the maximum flexibility. The arguments for keeping the shares and not selling initially include the fact that Northern Rock is an efficient business and that it might subsequently be bought out at a good price, although this is seen as unlikely in the short-term.
Holders who want to put their shares in a tax-free personal equity plan will need to make sure they get a share certificate. Northern Rock itself does not have a PEP; Fidelity's has been a consistent recommendation of ours (0800 41 41 71). Putting the shares in a Pep will boost the value of future share dividends to taxpayers and will also make the windfall wholly tax-free.
Northern Rock's first dividend is due to be paid next May and is expected to be worth at least pounds 30 before tax - taxpayers who do not PEP their shares will lose at least pounds 6 (pounds 12 if they are higher-rate taxpayers) in tax.
It is worth bearing in mind that selling windfall shares does make the profits potentially liable for capital gains tax, something that could be a problem if you have already sold a number of windfalls or other investments this financial year. If you are in this profit-rich position, putting the shares in a PEP first, then selling them for another investment, will avoid the Northern Rock proceeds being added to any tax bill.
Savers and borrowers due the Northern Rock windfall who have not received details of the handout and options by tomorrow, are advised to call Northern Rock on 0345 44 88 66.