LV= members to get £100 in deal with Bain Capital
Members will be advised to support the deal
Insurance and pensions group LV= said the proposed acquisition by Bain Capital will move to a vote by members on 10 December.
The company said members will share £111m in one-off payments, with every eligible member receiving a payment of £100.
There will be a £101m increase in future with-profit policy payout enhancements for all members holding eligible LV= With-profits policies.
Bain Capital will assume responsibility for supporting the ongoing business and exposure to future business risks – currently assumed by With-profits members.
With-profits business will be placed in a ring-fenced separate fund, inaccessible to Bain Capital and closed to new business. The long-term interests of with-profits members will continue to be protected by an experienced and independent with-profits committee.
Capital investment by Bain Capital is expected to benefit all members through technology improvements, development of existing and launch of new products and enhanced service for customers.
Alan Cook, chairman of LV= said: “We’ve built a strong brand, a rich heritage and have a real opportunity for future growth.
“However, in order to be successful in a highly competitive market, we need significant investment to compete and achieve our ambitions for growth.
“Bain Capital was the only option that offered both an excellent financial outcome for members and gave unrivalled support for the LV= brand, our people and locations.
“Whilst none of the bids would have allowed LV= to remain as a standalone mutual, this deal provides the highest distribution to with-profits policyholders compared to continuing with ‘business as usual’ or closing to new business.
“We urge members to carefully read the information in the Member Vote Pack and join our upcoming webinars.
“The board and I truly believe that this is the right way forward, enabling us to embark on the next exciting chapter of the LV= story, and recommend that members vote in favour of our plans.”