Royal London revives bid to merge with LV

Royal London last night revived its bid to merge with LV – offering a deal that would preserve its cherished mutual status. 

The company proposed immediate talks with LV in the wake of the collapsed takeover attempt by US private equity group Bain Capital. 

It said its latest proposal would see LV members’ life savings ‘protected and invested by a mutual’. 

Royal London was an original bidder when LV put itself up for sale in 2020 and tabled an offer £10m higher than Bain. But Bain’s deal was picked by LV’s board. 

Deal: Royal London proposed immediate talks with LV in the wake of the collapsed takeover attempt by US private equity group Bain Capital

The initial Royal London offer, like Bain’s, would have seen LV no longer run as a mutual but as a separate entity within its larger rival. 

But last night it offered a full-blown merger that would see LV members – those 1.2m customers with life and pensions policies – become members of Royal London, which has 1.6m members. 

LV’s brand would likely be sold off under the deal, potentially to German insurer Allianz, which bought its general insurance business in 2019. 

Royal London said the merger would create a ‘growing, well capitalised, modern mutual’ as well as ‘opportunities’ for LV staff – though it was not clear what commitments it would make around jobs. 

LV said its board was ‘evaluating’ Royal London’s proposal. 

It said the offer was ‘substantially different’ to the one in 2020 and included the possibility of continued mutuality. 

Peter Hunt, managing partner of mutual advocacy organisation Mutuo, said a merger with Royal London was a ‘natural fit’ as it preserves mutuality. But he did add that LV should also consider the possibility of remaining independent. 

He said: ‘If they have enough money to stay independent then that should be considered, and the option to merge with Royal London should also be considered. 

‘LV belongs to its members and they have clearly voted against demutualisation. That means remaining a mutual is the only show in town and the board must explore that.’

Major blow for Bain Capital

The failed takeover of LV is a bruising setback for Bain Capital. 

The Boston-based firm was set up in 1984 by former Republican Presidential candidate Mitt Romney. 

Over the years it has become a titan of the buyout industry. It is used to having its own way and is known as one of the most ruthless practitioners in the sector. 

But yesterday Bain was licking its wounds after a rare defeat for private equity which has been accumulating UK companies on the cheap throughout the pandemic. 

The failed takeover is also a hammer-blow to the reputation of Matt Popoli, the man fronting the Bain bid, and renowned at closing deals. 

The 46-year-old had been hoping to use LV as a springboard into the UK mutual sector – but his plans have been left in tatters.

This post first appeared on Dailymail.co.uk