Insurance mutual LV= has rejected a fresh approach from Royal London and repeated its call for members to back its sale to US investor Bain Capital, a move that will mean its demutualisation.
An earlier bid from Royal London, also a mutual, had already been turned down by LV=, whose proposed £530m sale to Bain goes before members in December.
Royal London’s new offer would mean splitting parts of LV= with Bain, acquiring some of its policies and leaving Bain to spin the rest of the business off as a separate entity.
LV= said on Tuesday: “The board confirms that an email was received from Royal London last week, being almost a full year after our transaction with Bain Capital was announced. It proposed the dismantling of LV=.
“The board of LV= continues to unanimously recommend the transaction with Bain Capital to its members ahead of the special general meeting on 10 December.”
The development comes amid a growing clamour against the proposed sale to Bain from politicians and the national press. Critics of the deal have claimed that Royal London’s original offer was greater than Bain’s, and have accused LV= of a lack of transparency with members.
Other recent developments include a report in the Guardian that Fenchurch Advisory Partners, the City firm led by Conservative Party treasurer Malik Karim, is profiting by advising LV= on the sale.
Mr Karim has denied there is any conflict of interest, telling the Guardian: “Our appointment to advise LV= on its strategic review significantly predated my appointment as Conservative party treasurer.”
He added: “We have acted for LV= on several matters since Fenchurch was established. Importantly there is no way that I would – or could – influence government in any way in this matter, or indeed in any matter.”
The Conservative Party has also said there is no conflict of interest, as has LV=, which added: “Fenchurch have been our corporate advisers for a number of years.”
Royal London’s new offer was revealed in a report by the Mail on Sunday, which said the mutual had written to LV= CEO Mark Hartigan.
But LV= chair Alan Cook said: “Despite having every opportunity, Royal London failed to submit a superior best and final offer, and therefore the board unanimously concluded that the better value, certainty, investment and structure of Bain Capital’s proposal would be in the best interests of our members.
“The board of LV= is clear that at no point have any of Royal London’s proposals included an offer for membership rights or continuation of mutuality for LV= members, contrary to media speculation. Given this context, the board of LV= believes it is unfair and misleading to characterise any proposal from Royal London as preserving mutuality or offering a real mutual alternative.”
Royal London CEO Barry O’Dwyer told BBC Radio 4’s Today programme: “We’ve had discussions on and off with LV= over the last eight years and we’ve long believed that combining our two great mutuals was a good idea to deliver long-term benefits for both sets of members.
“The near universal dismay which has greeted that proposal [from Bain] means that there is a significant risk now that members won’t support that proposal and so I sent a private email to the LV= chief executive offering to help construct an alternative.
“If there is an option available to them to join forces with another mutual to preserve that heritage and to make sure that those customers continue to get what they bought then they should explore that fully.”
Labour/Co-op MP Gareth Thomas, who chairs the All Party Parliamentary Group on Mutuals which has been conducting a critical inquiry into the proposals, said: “Barry O’Dwyer, chief executive of the Royal London Mutual, made clear that there are ‘all sorts of alternatives available to LV members’ instead of the board of LV’s controversial sell out to Bain Capital.
“We need the full facts about the Bain Capital bid and the Royal London bid in the public domain so that the members of LV= can make their own minds up about the future of their business. The board of LV= should now put the bid and tender documents in the public domain.”