Friends Provident price set at 225p

Members of Friends Provident will receive windfalls of at least £450, it emerged yesterday, after the life insurer priced its flotation at 225p a share, the lower end of expectations.

Members of Friends Provident will receive windfalls of at least £450, it emerged yesterday, after the life insurer priced its flotation at 225p a share, the lower end of expectations.

Friends raised £1.4bn by selling new shares to City institutions and existing policyholders, in an offer that was subscribed three times. Brokers to the Surrey-based company had earlier said the shares would be sold at 210-270p.

Keith Satchell, the chief executive, said: "I'm delighted with the price. Yes, it's at the end of the range, but it's halfway up the bottom half. Since the range was announced, markets have been less than spectacular."

Valued at £3.7bn, Friends will become the stock market's fifth- largest life insurance company when it starts trading on Monday and qualifies for the FTSE 100 index.

Under the demutualisation, policyholders will receive 200 shares in the new publicly quoted company. Some members, depending on the nature and age of their policies, are in line for much more. It was founded by Quakers in 1832.

Policyholders applied for £566m of additional shares in a preferential offer priced at 213.75p a share. Other policyholders opted to cash in their holdings, raising a total of £506m.

This was the fourth- largest IPO in Europe this year, after stock sales by Orange, Statoil and Inditex.