The proposed acquisition of LV= by US private equity firm Bain Capital will not go ahead.
Following the vote on the M&A deal at the special general meeting on 10 December 2021, only 69% of members backed the takeover.
For it to be approved, the acquisition would have needed 75% of votes. Just 175,460 people voted out of the 1.16 million eligible members, with 119,011 in favour of the Bain Capital deal.
LV= said that the numbers are subject to final verification, but it does not expect it “to affect the result”.
The insurer tried to boost voter numbers by contacting members via post and electronically.
A text seen by International Adviser to an LV= member last week said: “LV’s future is in your hands. You have less than 24hrs to cast your vote so that we can continue to serve our communities for years to come.”
Unfortunately, it seems that LV=’s push did not have the desired effect, as just over 6% of its total members voted.
A spokesperson for Bain Capital said: “We were invited by the board into this process and, out of 12 bids, the board unanimously selected ours as the best offer in December 2020. Whilst approximately 70% of LV=’s members voted for our proposal, we respect this outcome is not enough for our transaction to proceed.
“Our proposal for LV= was deemed to be the best for members, enabling LV= to grow, reduce its debt and maintain its proud heritage. It remains crucial that members are looked after and protected. We have always wanted LV= to flourish and become a leading company in the sector, that offers more consumer choice and creates more jobs.”
Royal London to the rescue?
Rival insurer Royal London immediately contacted LV= after the vote to bid again for the business.
Its original offer was among the final two when it went head-to-head with Bain Capital last year.
The insurer said it has offered to enter into “immediate and exclusive discussions with LV= to agree a mutual merger that will offer LV= customers the opportunity to have their life savings protected and invested by a mutual”.
LV= members could potentially become Royal London members under the proposed deal, which has been made on a “different basis” than its previous offer in 2020, the firm said.
Royal London continued: “We hope to agree a proposal that Royal London can recommend to our members. If we proceed, we will consult widely and provide clear information to members of both organisations about what this merger might mean for them.
“In the meantime, it is important to note that these discussions have no impact on our day-to-day business. Customers don’t need to take any action at this stage, and they will continue to receive the same high standard of customer service that they expect. There is no certainty that these discussions will result in a transaction and a further announcement will be made as and when appropriate.”
