LV= clarifies ‘misleading’ speculation over Royal London bid

LV= has firmly rejected claims that Royal London played a role in its proposed acquisition by Bain Capital.

In a statement released this morning (16 November), the mutual’s board seeks to draw a line under media reports that have emerged over the weekend.

They said Royal London, whose bid for LV= was rejected last year, presented a proposal to Bain Capital which involves cutting out LV=.

The statement just released confirms that an email was received from Royal London last week proposing the dismantling of LV=.

But the board said it continued to unanimously recommend the transaction with Bain Capital to its members ahead of the December 10 extraordinary general meeting.

Indeed, the agreement proposed by Bain Capital offers superior value for policyholders and the future of the company.

According to the LV= board, Royal London offered a slightly higher nominal value of £540 million, but wanted to leave material liabilities regarding the not-for-profit activity with LV=’s With-Profit fund.

Furthermore, he claims that Royal London’s proposal included higher and less certain administration and investment management fees.

He adds: “It is important to note that Royal London’s proposal would not have allowed LV= members to have membership rights in the wider mutual group, in line with its previous acquisitions of other mutuals. Describing Royal London’s proposal as offering “a mutual alternative, more favorable to LV= members”, is grossly misleading. »

The update follows one published Nov. 15 by Bain Capital which outlined several aspects of the deal it says are an improvement over the original offer.

These include increasing the number of policyholders from 1.2 million to over two million and an additional £160 million investment in IT modernization.

Commenting on Royal London’s offer, LV= chairman Alan Cook said: “Despite having had every opportunity, Royal London failed to submit a better final offer, the board therefore unanimously concluded that the best value, certainty, investment and structure of Bain Capital’s proposal would be in the best interests of our members.

“The LV= Board is clear that at no time have any of Royal London’s proposals included an offer of membership rights or continuation of mutuality for LV= members, contrary to the speculation of media. In this context, the LV= Board believes that it is unfair and misleading to characterize any Royal London proposal as preserving mutuality or offering a genuine mutual alternative.

He adds: “We are also surprised and disappointed by the timing of the intervention by Royal London, which comes more than a year after the end of our confidential discussions and seeks to destabilize the conclusions of our global strategic review, close to which is a very important vote for our members.

“Given our Special General Meeting on December 10, we are looking to clear the fog for our members and clear up all the uncertainty and confusion that has been created for our members ahead of what is a very important vote. The LV= board of directors continues to unanimously recommend the transaction with Bain Capital to its members before the special general meeting on December 10.

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