Insurer LV= offers £100 to every member for £530m Bain Capital takeover
British insurer LV= is offering its members £100 as a one-off payment, which will cost of a total of £111m, should takeover plans by private equity firm Bain Capital go ahead.
Eligible members of LV= are scheduled to cast their vote on the proposed takeover deal, worth £530m, on Dec 10. Three quarters of votes will be required for the takeover deal, first announced in December 2020, to go ahead.
If the deal goes through it will mark the end of LV=’s mutual status, and members would no longer own the business.
Among the financial benefits for members LV= outlined in a statement today, is an additional £101m in future “with-profit” policy payout enhancements for any member holding eligible ‘with-profits’ policies, which are aimed at making investments less volatile. After the takeover new customers will not be able to secure such policies.
Chairman Alan Cook said the business needed “significant investment” to compete in the insurer market.
“Bain Capital,” he explained in a statement, “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.”
Referring to the 12 formal bids the company received in 2020, Cook said “none of the bids would have allowed LV= to remain as a standalone mutual,” while “this deal provides the highest distribution to With-profits policyholders compared to continuing with ‘business as usual’ or closing to new business.”