Canada Life dashes hopes for windfall

British shareholders in the Canadian insurer Canada Life yesterday had hopes of a £4,200 windfall from a multibillion-pound takeover bid thrown in to doubt, when the company's board rejected the offer.

About 60,000 UK investors in Canada Life, who received their shareholdings when the group demutualised in 1999, were in line for the payout after a rival Canadian insurer, Manulife Financial, tabled a £2.7bn hostile bid.

The board of Canada Life, which derives a third of its business from the UK, yesterday rejected the proposal. However, Manulife plans to continue with its bid, and has appealed to shareholders to ignore the board's recommendation. Shareholders have until 28 February to decide whether to sell.

Dominic D'Alessandro, the chief executive of Manulife, said: "The reality for Canada Life shareholders is that the Manulife offer is the only offer on the table."