Standard Life members are to be offered cut-price shares as part of the insurance giant's planned flotation, sources said yesterday.
Members of the mutual insurer are expected to be offered shares at a discounted price in a bid to promote loyalty under the demutualisation.
Standard is also expected to offer a bonus of a further free share for every 20 held if members hold the stock for 12 months.
The pledges are likely to be made within an 80-page pack delivered to policy-holders today as part of Standard's preparations for a vote on demutualisation next month.
Standard requires 75 per cent of those voting to back the move, which will trig-ger average windfalls of almost #1,000 for its 2.4 million members - 50,000 are in the Birmingham area, 24,000 in Coventry, 13,000 in Dudley, 12,000 in Shrewsbury and 12,000 in Wolverhampton - as part of a #5 billion stock market flotation in the summer.
But it is understood the Edinburgh-based life assurer will seek to avoid a subsequent mass sell-off of its shares by offering a further free share for every 20 held if members keep the stock for 12 months along with the offer of cheap shares.
Chief executive Sandy Crombie needs a high turnout to wipe out the potential threat of a legal challenge. Unless at least half the members back the deal, Mr Crombie fears the Court of Session in Scotland could still intervene.
The turnout at the last demutualisation vote, which was forced by carpetbagger Fred Woollard in 2000, was around one million.
As well as details on the expected allocation of shares, Standard's circular will offer an insight into its financial performance over the past two years.
The mutual is expected to disclose it lost more than #100 million in 2004 but crept back into the black last year, helped by 3,500 job cuts and a drive to write more profitable business.
Standard Life began looking at the possibility of demutualising in early 2004, following the introduction of a new "realistic" accounting regime by City watchdog the Financial Services Authority.
Standard is said to be proposing a fixed payout of shares worth between #250 and #500 to all of the 2.4 million members who are eligible to vote.
Standard did not wish to comment ahead of the announcement. n The Royal Mail is handling the almost four million Standard Life letters in one of the biggest ever mail shots.
It laid on extra staff over the Easter weekend to help prepare the deliveries, which will amount to over 1,000 tonnes of post.
