Pressure is growing in the campaign to stop the sale of iconic mutual LV= to US investor Bain Capital, this time focusing on a reported rejected rival bid from mutual insurer Royal London.
The Daily Mail has published details of a letter from Labour/Co-op MP Gareth Thomas, chair of the All Party Parliamentary Group for Mutuals, asking the Financial Conduct Authority (FCA) to reveal details of the negotiations – including the Royal London bid.
It has been reported that Royal London offered £540m to Bain’s £530m, although Royal London, contacted by Co-op News, is not able to comment on the reports.
MPs on the APPG have conducted an inquiry into the proposed sale and demutualisation – which would see ordinary members given £100 and with-profits members getting an additional sum when their policies mature – and produced a critical report earlier this year.
The FCA said last month that it would not block the take-over but would continue to scrutinise the deal.
According to the Mail, Mr Thomas asked the regulator: “It is now clear that the two most valuable bids received by the Liverpool Victoria board were from Bain Capital and crucially, another mutual, Royal London. Will you confirm what many have explicitly suggested: that Royal London offered more money than Bain Capital?”
He argued that LV= members cannot make a “complete assessment” of the bids without receiving the full details.
The letter called on the FCA to release any information it has about how much chief executive Mark Hartigan and chairman Alan Cook will be paid if the deal passes.
Both men say they will receive nothing as a direct result of the deal but Mr Cook told a session of the APPG last month that “undoubtedly, there will be some form of long-term incentive for Mr Hartigan that in some way would be linked to the future financial success of the business” from the Bain takeover. Both men are expected to keep their jobs under the deal.
Conservative MP Kevin Hollinrake, also a member of the APPG, said: “The FCA needs to set out clearly the evidence and basis on which it has considered the consumer interest of the sale to Bain Capital.”
The Mail has published a form asking its readers to write to Mr Cook asking him to reconsider the decision to sell to Bain. Columnist Alex Brummer wrote that “the dismantling of Britain’s mutual sector has been one of the great acts of corporate vandalism of our times” and accused Mr Cook and Mr Hartigan of “betraying not only the policyholders but also the great Liverpool Victoria’s mutual values of common wellbeing, community and thrift“.
He also discussed reports that LV= is seeking members’ permission change its Articles of Association to ease the passage of the deal. Under the rules, a 50% turnover is required and 75% of those voting are needed to approve the transfer of ownership; LV= is said to be looking to lower this hurdle.
The move has drawn criticism Labour MP Dame Margaret Hodge, who said: “This appears to be a devious and underhanded way of getting what they want.“
And the deal has come under attack from Conservative peer Lord Heseltine, who wrote an opinion piece in the Mail branding it “insulting and disreputable.
“It is the equivalent of 30 pieces of silver, which evidently translates at today’s prices to £100. I urge all LV members to think about that before they vote.”
Meanwhile, the Times has reported that Royal London is considering reviving its plan to buy LV= if members reject Bain’s offer, with the vote due on 10 December. Royal London said it cannot comment on this report.
A spokesperson from the FCA said: “LV= members have the opportunity to vote on whether this takeover should happen.
“Our role, under law, is to ensure that customers are treated fairly and that there is no material adverse impact on them should the transaction go ahead. We have challenged the firm to make sure this happens.”
LV= has been contacted for comment.