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LV= takeover row escalates as CEO accuses Royal London of ‘lobbing grenade’ into Bain Capital deal

·3-min read
The £530 million sale of LV= to US firm Bain Capital was the ‘best financial outcome’ for members, it chief executive said (/PA) (PA Archive)
The £530 million sale of LV= to US firm Bain Capital was the ‘best financial outcome’ for members, it chief executive said (/PA) (PA Archive)

The battle over the future of mutual insurer LV= exploded into a war of words today, as its CEO accused his opposite number at Royal London of throwing “a grenade” into deal talks.

Royal London CEO Barry O’Dwyer this morning broke cover to publicly urge LV back to the negotiating table. He told BBC Radio 4’s Today programme there was a “significant risk” that Bain Capital’s £530 million take-over of LV could collapse amid what he described as “near universal dismay” at the deal.

“My message to LV is let’s talk,” O’Dwyer said. “There must be a better way.”

The intervention came shortly before LV released a statement defending the Bain bid and pushing back against Royal London’s claim that its bid offered a better deal for members. LV said this was “grossly misleading”.

CEO Mark Hartigan accused O’Dwyer of trying to torpedo the Bain deal. He told the Standard: “We wait a year, we’re in the middle of a very important vote, at the last minute they lob a grenade.”

Royal London got down to the final two bidders for LV last year but the Liverpool mutual opted for a bid from US private equity firm Bain.

Though £10 million lower, Bain promised to protect the LV brand and invest more in the business. The deal was struck last December.

Mutual members will vote on whether to approve it on December 10.

Opposition has grown in recent weeks after it emerged that members would get just £100 from the sale, which will end LV’s 178-year status as a mutual.

Hartigan said the board ran “a very thorough process” and said: “If [members] vote against this deal we will not have a future for LV, we will not have a future for staff and members.”

Hartigan attacked what he claimed was a “concerted campaign” to derail the bid and said there was a “coordinated effort” to block the sale to Bain.

He hit back at Royal London’s suggestion that it would better safeguard LV’s mutual status.

“All roads lead to de-mutualisation,” Hartigan said. “Royal London were not offering mutualisation.”

Asked if he was angry, he said: “I’m trying to stay even handed… don’t confuse passion to do right by our members [with anger]... my main emotion is disappointment [at Royal London].”

Over the weekend, it was reported that O’Dwyer had emailed Hartigan to suggest three-way negotiations with Bain if mutual members vote against the deal. O’Dwyer floated the idea of a carve up of LV.

He cited the leaked email as his reason for talking to the Today Programme. Hartigan said: “That email wasn’t private and I didn’t leak it.”

Asked if he had a message for O’Dwyer, Hartigan said: “I don’t have a message for Barry O’Dwyer… I am focused on this deal... I will not be undermined or turned.”

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