More than 3.5 million members of the Woolwich Building Society, Britain's third largest, look set to share in a shares windfall worth at least pounds 3bn following the society's announcement yesterday that it is planning to float on the Stock Exchange and become a bank.
Both the society's 600,000 borrowers and its 3 million-plus share account- holders will each be handed shares worth up to pounds 1,000 in return for backing the flotation, due in August next year.
While exact details were not given yesterday, any handout will mirror that of the Halifax, which is to float in April 1997. Its members are to get a basic share allocation, plus a further amount depending on the amount in their accounts.
But about 30,000 new savers, described by the Woolwich chief executive, Peter Robinson, as "carpetbaggers", will not benefit from the free-share bonanza after opening their accounts too late.
Mr Robinson, whose board set last 31 December as the deadline for new accounts to be opened, said yesterday: "I have no conscience at all about not enfranchising carpetbaggers."
Other non-gainers include Woolwich's 400,000 Prime Gold current account- holders, plus the society's 80,000 unit trust investors. Neither category are deemed members of the Woolwich.
Woolwich's 17 directors, including the chief executive and chairman, who received a total pounds 1.4m in payments during 1994, are likely to benefit from generous share option packages, similar to those awarded to newly listed corporations.
Sir Brian Jenkins, chairman of the society, stressed that any future decisions on pay were "firmly in the domain of the remuneration committee", itself composed of Woolwich board members.
The Woolwich, founded in 1847, has assets of about pounds 28bn and profits in the year to December 1994 stood at pounds 302m.
However, the decision by other top-10 building societies to seek a share listing had intensified the pressure on the Woolwich.
Two turbulent years of mergers, flotations and takeovers among Britain's top building societies, including Halifax and Leeds Permanent, Cheltenham & Gloucester and National & Provincial, raised the possibility that the Woolwich might not have been able to offer as competitively priced loans or savings products, leading to decline.
Mr Robinson, admitted yesterday: "Powerful forces for change . . . are producing an intensity of competition that, through consolidation, will polarise the industry into well- defined groups of large and niche players."
The move by the Woolwich also increases pressure on two other leading societies, Alliance & Leicester and Nationwide, to declare their own hand. Nationwide ruled out any sudden announcement. The Alliance, whose plans have been the subject of intense speculation, is believed to be almost ready to announce its plan to float.
But a spokeswoman said the society's board would "take any decision in its own time".
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