Royal London unveils LV= break-up plan
Barry O’Dwyer: alternative plan
Royal London has revived interest in bidding for rival pensions group LV= which is recommending an offer from US private equity firm Bain Capital.
The offer has divided the 1.2 million members of the Liverpool-based group with many objecting to what is seen as a paltry £100 payout to sacrifice the group’s mutual status.
An alternative proposal from Royal London would see it take over many of LV=’s policies, while Bain would spin off the rest of the brand into a separate business.
Royal London chief executive Barry O’Dwyer has made the proposal to LV= chief executive Mark Hartigan, according to an email seen by The Mail on Sunday.
It suggests an “early three way discussion between Liverpool Victoria, Bain Capital and Royal London” if members vote against the Bain takeover on 10 December.
The plan modifies Royal London’s previous approach which would have seen LV= retain its own mutual structure.
Royal London has never disclosed the size of its offer for LV=, but it is thought to be similar to Bain’s £530m.
Matt Popoli, head of insurance at Bain Capital, told MoS: “This is a growth investment for us. LV is a fantastic brand with a rich heritage which is not reflected by its market position.
“We see potential to grow LV’s current 1.2 million policyholders to around two million in the long term.
“We have an ambition to restore LV to its position as a top three life insurance provider across a wide range of products. Our proposal is strengthening LV’s financial position.
“Not only are we providing access to investment capital for growth, we will not be increasing LV’s debt.”