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LV defends Bain deal as it urges shareholders to vote in favour of takeover

Published: 09:30 22 Nov 2021 GMT

LV defends Bain deal as it urges shareholders to vote in favour of takeover

LV= defended its decision to sell the company to US private equity firm Bain Capital as it urged shareholders to approve the £530mln takeover at meetings on 10 December.

The insurance company, formerly known as Liverpool Victoria, has faced criticism over the payout to its members under the Bain deal.

Earlier this month, LV rejected a proposal from Royal London that involved splitting up LV.

Outlining its decision to recommend the Bain deal, LV said in a statement that a strategic review carried out in 2020 had concluded that the company was “a sub-scale, life and pensions business with an insufficiently strong capital structure and a loss-making new business unit, in need of investment”.

Pursuing a “business as usual” strategy as an independent mutual was not fair for members given the possibility that many of them would not see a return.

LV said it had considered 12 bids before its board unanimously decided that the Bain proposal offered the best outcome for its members.

Under the Bain transaction, £212mln will be available for distribution to members. The total expected member distributions increase to £616mln after including £404mln of the proceeds from the £1.1bn sale of LV's general insurance business to Allianz.

The company said £533mln will be distributed to 271,000 LV= Main Fund with-profit members, while non-profit members will receive £83mln. Each member will receive a one-off payment of £100.

LV chairman Alan Cook said: "We urge members to vote at the meetings on 10 December and vote in favour of the transaction with Bain Capital to protect both their interests and the future of LV=."

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