LV=’s board has denied claims that Royal London’s bid for the business would allow it to retain its mutual status and accused Royal London of “seeking to destabilise” its sale to Bain Capital.
In December last year, LV= announced its £530m sale to US private equity firm Bain Capital in a deal which would end its mutual status.
And last month, the Financial Conduct Authority granted permission for the mutual to proceed with the membership vote at a special general meeting on 10 December and court hearing related to the proposed sale.
However, the Mail on Sunday reported that Royal London has made a proposal to LV= that the insurer would be split with Bain should the sale be rejected by members.
Confirming receipt of an email from Royal London last week, LV=’s board claimed the email had proposed the dismantling of LV=, rather than the preservation of its mutual status as has been suggested.
“Despite having every opportunity, Royal London failed to submit a superior best and final offer, and therefore the board unanimously concluded that the better value, certainty, investment and structure of Bain Capital’s proposal would be in the best interests of our members,” LV= chairman Alan Cook said in a statement.
“The board of LV= is clear that at no point have any of Royal London’s proposals included an offer for membership rights or continuation of mutuality for LV= members, contrary to media speculation.
“Given this context, the board of LV= believes it is unfair and misleading to characterise any proposal from Royal London as preserving mutuality or offering a real mutual alternative.”
‘Seeking to destabilise’ deal
Cook said he was “surprised and disappointed” at the timing of Royal London’s bid, more than a year after the pair terminated merger discussions.
He also accused Royal London of “seeking to destabilise the conclusions of our comprehensive strategic review, in close proximity to what is a very important vote for our members.”
“Given our special general meeting on 10 December, we are seeking to clear up the fog for our members and remove all the uncertainty and confusion that has been created for our members ahead of what is a very important vote,” cook continued.
“The board of LV= continues to unanimously recommend the transaction with Bain Capital to its members.”
Royal London has been approached for comment.