Bain Capital's takeover of LV= off the cards

Written by Adam Cadle

13/12/2021

The proposed £530m sale of life and pensions business LV= to Bain Capital is now off the cards after mutal members voting in support of the deal fell below the 75% threshold.

Sixty-nine per cent of members voted to approve a Scheme of Arrangement to make a change to Article 14.23 at the Members’ Meeting.

A total 175,460 of the LV=’s 1.16 million members voted, with 119,011 members, representing 69% of valid votes cast, voting in support of the Resolution, and 52,251 members representing 31% of valid votes cast, voting against it.

These numbers are subject to final verification, which would not be expected to affect the result.

Following the vote last week, LV= said it is to "swiftly reassess its strategic options and explore alternative ways to provide the best long-term outcome for members, the business, employees and its wider communities".

LV= chairman Alan Cook said: “The board remains committed to finding a solution to the challenges presented by a declining with-profits membership base. As we have said throughout this process, the growth and investment required to remain competitive over the long-term is not a fair or appropriate burden for our With-profits members to bear. This investment would delay and potentially impact the level of returns they could expect to see, given a quarter of our members are with-profits policyholders today and we expect over the next ten years this will reduce to only 10%. Therefore, as we move into 2022, I will continue to lead the process to find a way forward that will enable us to provide the right financial outcome for all our members whilst respecting their different wishes. However, I also confirm that as soon as a way forward is agreed that I intend to step down as chair.

“As a board, our fundamental responsibility has always been, and will always remain, ensuring the best interests of our members. We are also deeply aware of our duty of care to LV=’s people and we will continue to do everything possible to find a solution that can deliver a continuation of the LV= brand and security for our 1,300 employees.

“The business is trading strongly and remains appropriately capitalised. As well as driving an improved trading performance, our CEO, Mark Hartigan, has delivered on the board’s requirements throughout this strategic process. The board continues to provide its absolute and full support to his ongoing work to address the long term challenges facing LV=.

“We want to reassure policyholders that this outcome will mean no changes to their policies or our ongoing commitment to the highest standards of service from LV=. I would also like to say thank you to our people, who have worked so hard to support our customers during this process and to our adviser network who we will continue to work closely with, supporting both them and their clients.”

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