LV= panel initially rejected Bain Capital deal in favour of Royal London bid
Execs sought further reassurances
Panel representing holders of LV= with-profits policies initially rejected the £530m Bain Capital deal for the insurance mutual
According to The Times, a committee overseeing the recent LV= sale only ended its resistance to Bain Capital's deal after LV= executives went back to the private equity firm to secure further reassurances that the representatives of with-profits holders. The newspaper reported that it was still not clear whether the committee approves of the deal.
The insurer said that, as a result of the deal, the capital available for distribution is expected to increase by up to 40% - capital which will be used to increase payments to with-profits members.
In an announcement on 15 December LV= confirmed all members will benefit from a cash payment to compensate for loss of mutual membership on the full completion of the acquisition, which is likely to be at the end of 2021.
The acquisition, still subject to approval, was first reported in June with LV= confirming discussions with Bain Capital in October.
"As a newly standalone life and pensions business in an increasingly competitive market, the board recognised that LV= required significant long-term investment to be sustainable," said LV= chairman Alan Cook at the time of the deal. "This transaction is the culmination of an extremely thorough and robust strategic review - followed by a structured sale process to secure the best long-term future for our members, employees, other stakeholders and the business."
He continued: "The board is delighted to have secured an attractive price and unanimously agreed that the transaction with Bain Capital presents an excellent financial outcome for all our members, as well as offering an unrivalled commitment to LV='s future prospects, business and people."
The transaction will be carried out in two stages, with Bain Capital first acquiring LV= subsidiary LVLC together with the administration and new business infrastructure.
LV= buyer Bain Capital 'very supportive' of protection plans
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