The board of directors of Canada Life Financial Corp. has formed a special committee with a mandate to review the proposed offer $6.4 billion takeover bid from Manulife Financial Corp.

Manulife will offer for each Canada Life common share either (1) $40 in cash or (2) 1.055 Manulife common shares. The offer will be capped at 40% cash and 60% Manulife common shares.

The special committee has retained BMO Nesbitt Burns Inc. and Credit Suisse First Boston as financial advisors.

David Nield, chairman and CEO said that, “In my view, this proposal does not reflect the value of our company. We and our professional advisors are reviewing our strategic options.”

Canada Life will not discuss any further details about the Manulife proposal until its Board of Directors has met.

In a separate announcement, Canada Life said it will be adopting the fair value method of expensing stock options effective Jan. 1, 2003.

It also released financial guidance for 2003. Canada Life said it expects common shareholders’ net income per share in 2003 to be between $3.45 and $3.55, which will be an increase of 15% to 18% over the expected 2002 figure. Associated with this, return on common shareholders’ equity is projected to be in a range of 14% to 14.5%.

Bill Acton, president and COO said that, “In 2003, we expect significant earnings growth in our European divisions following very attractive acquisitions made in 2002, and as the benefits of systems investments made in the UK start to flow into income.”