MORE than 833,000 investors in mobile phone operator O2 were expecting a windfall last night after cashing in their shares at a premium rate.

O2, which has changed its corporate name from mmO2, said investors who received shares when it split from BT in 2001 were likely to bank profits of more than 50 per cent.

About 1.5 billion O2 shares were offered - five times more than the limit announced in January.

Following a review, O2 said the number of investors would be reduced by half after it accepted applications from 833,011 shareholders owning 1,000 shares or less.

O2 wanted the move because, in the case of small investors, it was likely to cost more to send dividend cheques than the dividend itself was worth.

There were also concerns that minor shareholders would be unable to trade their shares on the open market because of the broker fees involved.

Under the offer from O2, investors selling their shares will receive the market price plus an additional 5p.

It forms part of a capital reorganisation that means O2 can pay a dividend at the end of its financial year. Analysts expect a maiden payment of between 1p and 2.54p a share.

O2 has also been delisted from the New York Stock Exchange because it has no plans to develop any operations in the US.

A spokesman for O2 expressed delight at the simplification of its shareholdings, although the company will still rank among the top ten companies in the FTSE 100 Index for retail investors.

Investors who acquired shares in O2 in 2001 at a price close to 80p are in line for profits of more than 50 per cent as shares were trading at 127p yesterday morning.