LV= rejects revised approach from Royal London
LV= continues to back Bain Capital bid
Insurance company LV= has rejected the revised proposal from Royal London and will continue to recommend the takeover offer from Bain Capital.
Two initial proposals were considered from 12 it received and the board concluded that Bain Capital offered the best outcome for LV= members.
In a statement responding to Royal London’s revised proposal, the board said it “confirms that an e-mail was received from Royal London last week, being almost a full year after our transaction with Bain Capital was announced.
“It proposed the dismantling of LV=. The board of LV= continues to unanimously recommend the transaction with Bain Capital to its members ahead of the special general meeting on 10 December.”
Explaining its decision, LV= said Bain Capital offered £530 million for LV=’s non-profit business and would also assume all material historic and future liabilities in respect of the non-profit business. Bain Capital also offered a perpetual fixed rate card for both administration and investment management.
Royal London offered a marginally higher headline value of £540 million. However, unlike Bain Capital, Royal London was proposing to leave material liabilities in respect of the non-profit business with LV=’s With-Profit Fund.
Additionally, Royal London’s proposal included higher and less certain administration and investment management costs.
“Reflecting these differences, the value offered by Royal London was lower than the value offered by Bain Capital, on a comparable basis,” said the board.
“Therefore, the board of LV= concluded that Bain Capital offered greater value to LV= members when compared on a like-for-like basis and would result in greater and more certain pay-outs to members, on a more accelerated basis.”
The board added that Bain Capital is committed to investing in and supporting the growth of the LV= new business franchise and brand.
“As mentioned in Bain Capital’s announcement yesterday, it is committed to investing up to £160 million as part of its go-forward plan for LV=.