Sun Life of Canada Policyholders vote overwhelmingly for DemutualizationEligible policyholders of the Sun Life Assurance Company of Canada have voted overwhelmingly in favour of the Company's plans to demutualize. Sun Life of Canada expects to complete its demutualization and initial public offering in March of 2000.
The demutualization vote was conducted at a Special Meeting of eligible policyholders today at Roy Thomson Hall in Toronto. Just over one million policyholders were eligible to vote in person or by proxy. Some 450,285 votes, or more than 42.5% of total eligible votes were cast at today's meeting. Of these, approximately 441,378 or 98% cast ballots in favour of the Company's plan to convert to a publicly-traded stock company.
"This is an historic moment for the Company and its policyholders," Donald Stewart, Chairman and Chief Executive Officer, said to those attending the Special Meeting. "Today's outcome signals confidence in the Company's potential to grow and compete in the financial services industry. The conversion into a publicly traded company will provide Sun Life of Canada with enhanced access to capital and increased flexibility while eligible policyholders will benefit by receiving the entire value of the Company."
Under demutualization, eligible policyholders - principally in Canada, the United States, the United Kingdom, the Philippines and Hong Kong will be allocated shares in a new holding company called Sun Life Financial Services of Canada Inc.
Following today's successful vote, Sun Life of Canada will seek final regulatory approval for demutualization from Canada's Minister of Finance. On December 6, 1999, Sun Life of Canada received approval from the Michigan Commissioner of Insurance.
The marketing of the Initial Public Offering (IPO) of the shares of the new holding company is planned for March of 2000. Sun Life of Canada's demutualization and Initial Public Offering (IPO) are targeted for completion in March of 2000. The shares in the new holding company are intended to be listed on the Toronto, New York, London and Philippine stock exchanges.
Allocation and value of shares
The number of shares allocated to each eligible policyholder will vary widely. The minimum allocation is 75 shares, while the average allocation is 378 shares. Policyholders will be sent a "Choices Guide" in January, which will set out the options they have with respect to holding their shares or selling them for cash. Due to securities laws and administrative concerns in jurisdictions where Sun Life of Canada has very few eligible policyholders, policyholders resident in those jurisdictions will have their shares sold on their behalf in the IPO. In some very limited cases, eligible policyholders will receive policy credits.
Sun Life of Canada's financial advisors (Morgan Stanley & Co. Incorporated and RBC Dominion Securities Inc.) have provided a valuation report which estimated that the Company's range of public equity market values at September 24, 1999 was Can.$5.6 billion to $8.4 billion.
Based on this estimate, and on a total of approximately 400 million shares being issued on demutualization, the estimated IPO price, as at September 24, 1999, would have ranged from Can.$14.00 to $21.00. This is an estimate only and not a prediction of what price the shares will be in the future. Furthermore, the IPO is not expected to be completed before March of 2000, several months after this estimate was made.
The actual prices of the shares at the time of the IPO or afterwards could be higher or lower than the estimate at September 24, 1999. The actual IPO price will reflect the likely strength of demand for the shares, market conditions at the time of the pricing and the financial results and future business prospects of the Company.
Sun Life of Canada's conversion to a publicly traded stock company is one of the most far-reaching insurance company demutualizations to date, involving eligible policyholders in more than 130 countries. The demutualization is being undertaken concurrently with a corporate reorganization that will involve the transfer of the Company's insurance businesses in the United Kingdom, Hong Kong and the Philippines to wholly owned subsidiaries.
As at September 30, 1999, Sun Life of Canada had total assets under management of Can.$ 264 billion, well ahead of any other Canadian-based life insurer. The Company offers a broad range of financial products to individuals and groups through operations in Canada, the United States, the United Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, Australia, Bermuda and Chile.
A registration statement relating to the common shares of Sun Life Financial Services of Canada Inc. (formerly named Sun Life of Canada Holdings Corp.) has been filed with the United States Securities and Exchange Commission but has not yet become effective. The common shares may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This announcement shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the common shares in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
Percentage Voted in Favour by Country
For further information:MEDIA CONTACTS:
Canada: Audrey Gouskos, (416) 204-8155
Francine Cléroux, (514) 866-2561
United States: Keith Moore, (781) 446-1294
United Kingdom: John Moulding, (44) 1256 303345
Hong Kong, Tommy Ng, (852) 2103-8822
Philippines: Mariquit Lintag, (011) 632-845-8635.
Canada: 1 (800) SUN LIFE (1 (800) 786 5433)
United States: 1 (800) 891 8145
United Kingdom: 0845 606 6622
Hong Kong: (852) 2103 8988
Philippines: 878 9800 (within Metro Manila)
1 800 1 888 8786 (from Provinces)