Woolwich will not be the last

WITH the pounds 800-a-head Woolwich shares windfall offer now out in the open, savers and borrowers can still look forward to other building society bonanzas.

The Alliance & Leicester is widely expected to announce a similar shares windfall within weeks. It says it is considering a Woolwich-style switch to the stock market, although it denies it has made a final decision to go ahead. And there is even the possibility, according to one leading analyst, that the Woolwich itself could take over another chunky building society, allowing savers and borrowers with the swallowed society to piggyback, in effect, on the Woolwich's share deal.

Three and a half million savers and borrowers with the Woolwich stand to get free shares under its proposal to convert into a bank and join the stock market, probably late next year.

The society announced plans last week to give a basic handout of shares likely to be worth at least pounds 500 and - to some savers - additional shares related to their account balances. Rob Thomas, building society analyst at City broker UBS, estimates the shares could be worth an average of pounds 800 for each saver and borrower who qualifies, based on a possible stock market value for the new bank of between pounds 2.5bn and pounds 3bn. But the actual value of the windfall will depend on the share allocation - which may be announced later this year - and what price the market puts on the shares when they start trading.

Our table shows the winners and those who miss out on the shares. The Woolwich says that under building society rules it is not allowed to pay windfalls on accounts and products in the second excluded list, because holders of those do not become members of the society.

It is also excluding around 40,000 new savers who have opened accounts this year amid mounting speculation that an announcement was imminent. Normally, the society might have expected just 2,000 account openings. Woolwich chief executive Peter Robinson said he had no regrets about "not enfranchising carpetbaggers". Further details on eligibility for the share handout and the proposed conversion are in a leaflet called Your Questions Answered sent out to all the society's members, which will also be available in branches. There is also a customer information line: 0345 022033.

The rules on who will qualify for the additional shares are "terribly complicated", the society admits. Everyone eligible for shares should keep at least pounds 100 in their accounts until the society converts to ensure they remain entitled to the basic handout. For savers with bigger balances, it may be worth keeping accounts stocked up. The entitlement to extra shares will be calculated by looking at the lower of your balances on two separate dates. One is 31 December 1995, the other has yet to be announced. There may also be a minimum balance figure for qualifying for any extra shares.

The Woolwich's members should get to vote on the proposed share handout next year. In the meantime, there is the possibility that a takeover offer for the society by a third party could lead to a revised bonus scheme. Equally, according to UBS's Mr Thomas, there is the possibility of the Woolwich taking over another society before its own conversion. He names the Bristol & West, Yorkshire, Birmingham Midshires, Britannia and Bradford & Bingley building societies as possible targets.

The next favourite for a windfall announcement remains the Alliance & Leicester. It says it is considering a switch to bank status like the Woolwich and an announcement is expected in weeks. But the Alliance & Leicester has raised the opening balances on those accounts carrying membership status and most likely to get any windfalls, in a bid to deter speculators.

Who gets the shares?

3.5 million savers and borrowers with the following accounts and mortgages:

Share, Prime Gold, Premier 90, Tessa, Woolwich for Kids, Woolwich Investment Bond, Premium Investment, Prime, Guaranteed Premium Share, Capital, Supershare, Town & Country Current Account (formerly Moneywise and Outlook), Super 60 (type A), Super 90 (type B), Super 90 (type C), Super 90 (type D), Fixed Rate Bonds, Guaranteed Growth Bonds, 7 Day, 28 Day, Monthly Income Shares, Cashbase, Sharesave Accounts, Save As You Earn.

Mortgages:

Standard, Equity, Easy Step, Discount, Fixed, Homeowner Regulated and Unregulated, Deedstore, Woolwich Direct

To qualify for the basic handout of shares people must have had savings balances or mortgages of at least pounds 100 as at 31 December 1995 and keep a balance of pounds 100 until the date the Woolwich converts. Account-holders must be adults. Employees and pensioners of the Woolwich also qualify. Some savers will get extra shares according to the size of their balance.

Who doesn't get the shares?

500,000 customers including:

40,000 people opening the above accounts this year.

People with the above qualifying accounts but whose total balance with the society was less than pounds 100 as at 31 December.

Children holding accounts in their own names.

Second-named people on joint accounts.

People with the following accounts and other products, which do not carry membership: Current Account, Deposit Accounts including Time Deposits, All Woolwich Unit Trust products including PEPs, All Woolwich Life products including Guaranteed Income Account/Bond, All Woolwich Guernsey accounts, AVC, personal unsecured loans, all other insurance products.