Insurance mutual LV= will this week assess a takeover offer back on the table from rival Royal London after its members last week rejected a £530m takeover bid from US private equity giant Bain.
In a vote on Friday, 69 per cent of LV=members who voted supported the deal with Bain – but they fell short of the 75 per cent of votes needed for the deal to go ahead.
The 178-year-old mutual insurer previously declined an offer by Royal London, arguing that a deal with Bain Capital offered greater assurances to protect the jobs of over 1,000 employees in the South West, even though Royal London offered £10m more than Bain.
But minutes after the vote, in which only 15 per cent of LV’s 1.2m policyholders took part in, Royal London confirmed that it had put a new deal on the table.
LV= said the new proposal was “substantively different” to the one made last year 2020, and now includes the possibility of continued mutuality for the insurer, on the condition of “exclusive discussions”, according to the Sunday Times.
Royal London confirmed that the terms of a potential merger “would offer LV= members the option to become members of Royal London.”
A merger, the rival company said, would create a “well-capitalised, modern mutual” amid a market dominated by shareholder-owned companies.
The new bid is at “an early stage” and still subject to discussion, checks and “negotiation of financial and other terms,” said LV.
The LV= board said it will “consider this proposal seriously” and will update members “as soon as practicable,” but it will likely be in the new year.
But “LV should not run from the arms of Bain straight into those of Royal London without standing back and deciding what its options are,” one with-profits LV= policyholder, retired solicitor Peter Bloxham, told the Sunday Times.