LV= members rejected the deal in December
(Picture: LV=)Royal London is once again circling LV= as a board clear-out at the in-crisis mutual continues.
LV=’s new interim chair today said talks were ongoing with Royal London about a potential deal or partnership, following the collapse of LV=’s sale to private equity group Bain in December.
Seamus Creedon said: “We have had, and continue to have, discussions with Royal London about if and how we can co-operate.”
Royal London confirmed “initial, exploratory discussions” but said there was “no certainty that these discussions will result in a transaction”.
It comes amid turmoil at the top of LV= and questions over its future.
The life insurance and savings group announced a deal to sell itself to Bain Capital for £530 million in December 2020, saying the takeover would provide the investment needed to survive.
LV= faced criticism for a lack of transparency on the deal and opposition grew as more details emerged. The sale would have ended the 178-year-old business’s status as a mutual, and members would have received just £100 in return. Management ultimately abandoned the sale after it failed to gain shareholder approval at a vote in December 2021.
Royal London had been in the run-off against Bain to buy LV= but management rejected its proposal, saying Royal London’s higher offer wouldn’t have secure LV=’s independence.
Royal London CEO Barry O’Dwyer made repeated overtures towards LV= mutual members during the Bain process and tried to open three-way deal talks. O’Dwyer offered to restart deal talks as soon as the Bain deal collapsed. LV= boss Mark Hartigan accused his rival of “lobbing a grenade” into the deal.
LV=’s incoming interim chair Creedon today struck a very different tone, saying: “We share a common interest with Royal London in a healthy and vibrant mutual sector so that we can both compete fairly with shareholder-owned firms.”
With talks ongoing, LV= “will continue to strengthen our independent business for the benefit of our existing and future policyholders,” he said.
Creedon will replace Alan Cook as chair from April 1. Cook announced plans to leave after December’s failed takeover vote. He is one of several board members stepping down. David Barral, Alison Hutchinson and Luke Savage are all leaving in the coming months, it was announced today.
Hartigan remains in charge despite calls for him to go. Creedon backed Hartigan, saying he has “high confidence in him and his team”. He plans to work “closely” with Hartigan to rebuild the board.
The failure of the Bain deal has left LV=’s future in doubt. Ahead of December’s vote, Hartigan said the mutual would “not have a future” if the takeover failed.
Creedon said today: “We have a strong balance sheet and have refocused our planned IT investment to continue to carefully manage our capital in order to sustain value for members.”
He said Hartigan “has been doing an excellent job in strengthening the performance of the business.”
