The 500 free shares each member will be sent could be worth as much as 390p each, according to the Newcastle-based mutual's local broker, Wise Speke.
The forecast is based on the average price of shares in Abbey National, Halifax, Woolwich and Alliance & Leicester in relationship to their forecast earnings and the likely dividend yield in 1998.
The expected valuation reflected the high current rating of shares in the financial sector rather than an assessment of fair value, Wise Speke's analyst, Geoff Miller, said yesterday.
Unlike other converting societies, Northern Rock will not qualify for a premium rating as part of the FTSE 100 index, despite an estimated market value on flotation of around pounds 2bn.
Information packs are being posted out to members, offering them a choice of selling their shares for cash before dealings begin, keeping them in a nominee account or receiving a share certificate.
Completed forms indicating what members want to do with their shares must be received by 26 September in order to sell at an auction of shares planned for the day before first dealings or to join a nominee account.
A single auction will be conducted by brokers Hoare Govett after hours on Tuesday, 30 September.
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