Windfalls of pounds 5,000 as AMP floats in Sydney

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MORE THAN 171,000 UK policyholders yesterday made windfall gains worth on average pounds 5,000 each as AMP, the big Australian insurer, floated on Sydney's stock market.

The average value of windfall gains rocketed by 45 per cent as institutions bought the shares heavily. The opening price of A$16 had leapt to A$23 by the time the market closed.

As recently as October, shares were expected to open at A$10.37 at the most, valuing the average windfall at just pounds 3,000. In May, AMP revised the figure, saying the society's 1.7 million world-wide members could expect the opening price to be as high as A$16.

However, 200,000 policyholders across the world who elected to sell their shares through a free dealing facility will miss out on a big chunk of yesterday's bonanza.

In exchange for free dealing, these members had agreed to sell at a "facility price" to be based on the market price next Monday. But the deal capped the facility price at no more than 20 per cent over the A$16 base price - or A$19.20. This limits their windfalls to an average of pounds 4,152.

By contrast a further 375,000 had agreed to buy A$1,000 of extra shares rather than sell. They will benefit from the capped facility price, which allows them to buy extra shares at less than market value.

The British gainers from AMP's listing include 94,000 members of London Life, which AMP took over, and 77,000 members of AMP UK. Policyholders with Pearl, the company's other UK acquisition, are not entitled to windfalls.

Many of the British policyholders stand to gain substantially more than the pounds 5,000 average because they have held their policies for longer than average. The size of the payout depends on the amount of money in the policy and the length of time it has been held.