Irish Canada Life shareholders left out in the cold

Up to 5,000 Irish Canada Life shareholders are being left out in the cold by the company's new owners.

The shareholders, who account for about 20 per cent of Canada Life's Irish investors, are not being allowed to avail of an assisted sales programme to sell shares in Great-West LifeCo, which they received in part payment for the Canada Life shares. That means they will face bills of around €70 to get rid of shares rather than the €32 charge to those eligible for the assisted sales programme.

The Canadian insurance giant, whose shares trade only on the Toronto Stock Exchange, put in place a special programme allowing people to sell shares they had received but did not want.

However, it is open only to people who hold their shares electronically.

Canada Life shareholders who held share certificates were not granted the opportunity of having any shares they received from the sale held in electronic form.

While many of the Irish shareholders holding share certificates will have opted for cash, there are a number who now find themselves with shares they did not want.

Shareholders in Canada Life were allowed choose whether they wanted to be paid in cash and/or common or preferred stock following the closing of the deal with Great-West Life. Only 60 per cent of the purchase price was paid in cash, with the balance paid in ordinary shares (29 per cent) and two types of preferred stock which, between them, accounted for 11 per cent.

The people most affected by the Great-West Life bar on certificate holders are those who sought only ordinary shares. This category was considerably oversubscribed with the result that people found themselves with a small number of Series E and Series F preferred shares.

They are now facing the prospect of paying €70 in stockbroker commissions to dispose of shares worth in some cases less than twice that value.

A spokesman for Computershare, the share registrar handling the transaction for Great-West Life, said only those people specifically requesting a share certificate had received one.

However, a spokesman for Great-West Life subsequently acknowledged that there was no way for certificate holders to opt for an electronic holding as part of the Canada Life acquisition.

But he said he was confident that 99 per cent of Canada life shareholders will have got what they wanted. "For those few who have not, these shares are still valuable."

He urged those who have yet to return their old Canada Life share certificates to do so. If they do not, they will receive no payout and, in five years, that money will revert to Great-West Life.