Sun Life sets out demutualization plan for share allocation

The company’s proposal calls
for policyholders to receive groups
of shares in two components.
In the fixed component, each holder
of a policy in force on January
27, 1998 receives 75 shares.

In the variable component each
policyholder receives 32 shares
for each C$1,000 of what the
company calls the “times-weighted
cash value” of the policy –
determined by multiplying its
cash value on January 27, 1998 by
the number of years that the policy
was in force. In the same
component, each eligible
policyholder receives 64 shares
for each C$1,000 of annual
premium payable on the same
date.

The company estimates an
average total allocation of 378
shares per policyholder. It says
that the share price should
range between C$14 to C$21, based
on current book value and market
conditions in late September.
In that range, the average
allocation would be between
$5,292 and $7,938, if the
policyholder elects to cash out
at the IPO price.

If the proposal is accepted by
two-thirds of ballots cast before
and during a special meeting
scheduled for December 15,
the company will offer cash or
shares to eligible policyholders
as it converts from mutual status
in which it is owned by
policyholders, to public status
in which it is owned by
shareholders.

If policyholders approve the
plan, they will receive a second
circular in early 2000, asking
them to choose between cash or
shares. Those receiving less than
1,000 shares must take their
entire allocation as either
cash or shares, while those with
more than 1,000 shares can divide
their allocation.