Royal London has offered to start “immediate” discussions with LV= about a potential merger, after plans to sell LV= to a US venture capital firm collapsed today.
LV=, formerly known as Liverpool Victoria, had asked its members to vote on the selling the organisation to Bain Capital in a £530m deal. Although 69 per cent voted in favour this was below 75 per cent threshold required for the deal to go through.
Just 15 per cent of LV=’s 1.16m member voted on this special resolution. As a result the transaction with Bain Capital will no longer proceed.
Royal London had previously expressed interest in a merger of the two organisations. It said this new merger proposal was on a different terms to those made in 2020, and would cruciallly allow LV= members to remain part of a customer-owned mutual organisation.
In a statement this afternoon Royal London said: “We are confident that there will be exciting opportunities for colleagues within both Royal London and LV= as part of a larger well-capitalised and growing mutual.
“We hope to agree a proposal that Royal London can recommend to our members. If we proceed we will consult widely and provide clear information to members of both organisations about what this merger might mean.”
LV= confirmed it had received an unsolicited merger proposals that was “substantively different” to the one received during 2020. It said the board would consider this proposals seriously and undertake to update members as soon as is practicable.
Speaking about the collapse of the Bain Capital deal, LV= chairman Alan Cook said the company would continue to look at new investment options to fund future growth as this is no longer an appropriate option for with-profits members to bear.
He added: “As we move into 2022, I will continue to lead the process to find a way forward that will enable us to provide the right financial outcome for all our members. However, I also confirm that as soon as a way forward is agreed that I intend to step down as chair.”
He said the business is trading strongly and remains appropriately capitalised.
Cook added: “We want to reassure policyholders that this outcome will mean no changes to their policies or our ongoing commitment to the highest standards of service from LV=.”
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