Did you profit from Friends Life mistake?

Friends Life (FLG) shareholders got a shock Wednesday morning. After closing at 430p the previous day, Friends shares traded as low as 404p, or down 6%, within 16 minutes of the opening bell. But this was a clear error, and eagle-eyed investors who were quick enough to spot the mistake could have made a small fortune.

The £5.6 billion takeover of Friends by Aviva, the insurance industry's biggest deal in over a decade and which is near to completion, is the cause of this misunderstanding.

Friends said back in January that the record date for a second interim dividend was 6pm on 9 April. Shareholders on the register then would get the 24.1p per share payout. But stocks typically go ex-dividend on a Wednesday, which the City clearly believed to be the case in this instance.

But it wasn't until 10.52am that the insurer issued a stockmarket announcement to clear up the confusion. "Friends Life shares should not trade ex-dividend ahead of 6pm on 9 April," it said.

That sparked a stampede back into the shares, although it still took until 11.30am for them to regain all the lost ground.

Dealings in Friends Life shares will be suspended from 7.30am on 10 April, and the second interim dividend will be paid by 24 April.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.