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Bain Capital fights for LV= takeover despite growing resistance

·2-min read
An advert for LV car insurance (LV=)
An advert for LV car insurance (LV=)

Bain Capital today sweetened its offer for LV= as the private equity company fights to win approval for the controversial deal.

Bain shared fresh details of the proposed takeover and pledged not to saddle the insurer with debts.

The private equity giant said it will invest £264 million to safeguard the pensions of more than 10,000 policy- holders and staff. Bain had previously committed to investing £168 million to fund pension liabilities.

Bain promised to invest £160 million in LV=’s IT infrastructure, the first public pledge on tech. And the investment company said no new debt would be added to LV=’s balance sheet as part of the takeover. LV= will look to reduce its debt pile as soon as possible under Bain’s ownership.

Matt Popoli at Bain Capital said: “To be sustainable and achieve long-term success, LV= needs capital to address its heavy debt pile, fund its pension liabilities and invest for growth.

“As a result of the transaction, LV= will be strengthened with access to more capital and structured with less debt.”

The defence comes as Bain’s takeover of LV= faces mounting opposition from politicians, mutual members and the press.

The £530 million deal was first announced in December 2020 but opposition has grown in recent weeks after it emerged members would receive just £100 each under the terms of the takeover, which will bring an end to the 178-year-old business’s status as a mutual.

Opponents argue members are being shortchanged and oppose the loss of LV=’s mutual status.

Bain beat Royal London, another mutual, in the race to buy LV=. The Mail on Sunday reported that Royal London recently re-approached Bain about a possible break-up bid for LV=.

Popoli said: “Our proposed investment maintains an independent LV=.”

Mutual members will vote on the Bain deal on December 10.

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