The chief executive of British insurer LV= has backed the firm’s decision to sell the business to US private equity firm Bain Capital.
The £530m ($716m, €620m) deal would see the company lose its status as a mutual as it will stop being owned by its current 1.2 million members.
Mart Hartigan, chief executive of LV=, told the BBC’s Today programme that the M&A deal with the US private equity firm is the “best financial outcome” for members.
The 1.2 million ‘owners’ are now being asked to vote on the deal on 10 December 2021.
To go ahead, 75% of voters will need to back the takeover. An additional vote will then follow to decide whether the business should be fully transferred to Bain Capital or if the private equity company can carry out business under the LV= brand.
Hartigan said: “It’s the only bid that safeguards the LV brand that our members loved.”
He added that Bain Capital was “the only business that is prepared to invest in our growth”.
“That means saving the jobs that we have and the sites that we operate in, and also the future-serving of the communities that LV= serves.”
He, however, did not confirm to Today if all jobs would be safe following the acquisition.
Timeline
Hartigan’s interview follows a series of criticism the M&A deal has attracted since its announcement in December 2020.
First, it was put under scrutiny by both MPs and the All-Party Parliamentary Group (APPG) for Mutuals, as they were concerned about the firm’s loss of its mutual status.
Then, it emerged that fellow insurer Royal London was considering resuscitating its acquisition bid for LV= in case its members voted down the sale to Bain Capital.
Recently, the chair of the APPG for Mutuals wrote to the Financial Conduct Authority to ask for additional information on the M&A deal.
This is because there was speculation going around that Royal London had actually offered more than the US private equity firm, and a sale to the British insurer would actually allow LV= to retain its status as a mutual.
