Windfalls for Irish members if Scottish Provident is taken over

Irish policyholders with Scottish Provident could be in line for a windfall if the life and pensions group accepts a bid from Abbey National which is worth up to £2 billion sterling.

Should Scottish Provident accept the offer, 75,000 Irish with-profits policyholders are likely to receive several thousand pounds each. An announcement on the future of the Edinburgh-based mutual is expected in the coming days. The board of Scottish Provident began a strategic review of its future status in February aimed at maximising value for its more than 400,000 members.

The review is now in its final stages but a group spokeswoman says no decision has been taken on whether to remain a mutual society, sell to a trade buyer or float on the stock exchange.

The mutual employs more than 200 people in Dublin, where it has had a presence since the mid-19th century. Speculation about significant job cuts has been dismissed as unfounded by the group. In an effort to prevent "carpetbaggers" from rushing in to buy policies in the hope of a windfall, Scottish Provident decided that only policies which were accepted by the company by April 5th would qualify.

Scottish Provident is relatively small, with total assets under management of £10.5 billion sterling. When the review was first announced, analysts were suggesting that if the group was to float, members could stand to gain at least £2,000 on qualifying with profits policies. Higher figures of up to £6,500 sterling are now being quoted in relation to the Abbey National bid. If the board accepts the bid, members will be asked to vote on the decision.

The position of Aberdeen Asset Management, which is 38 per cent owned by Scottish Provident, remains unclear. Aberdeen moved to quell speculation that Scottish Provident was on the verge of dumping its stake as part of the Abbey National deal.

But analysts said that Abbey would be reluctant to absorb Aberdeen along with Scottish Provident because it might upset fund managers at its own Scottish Mutual life and pensions business, sparking an exodus of talent.