Monday 07 February 2022 7:57 am | Updated: Monday 07 February 2022 4:16 pm

Second chance at LV= for Royal London

Royal London is engaged in talks with LV= which could see the two companies merge to become a UK insurance heavyweight.

LV= has announced a shake up to its leadership paving the way for a takeover bid by fellow mutual Royal London.

Royal London has been waiting in the wings since LV= investors voted down a £530m takeover offer by US private equity giant Bain Capital in December. Today, Chair Alan Cook fell on his sword over the failed deal with interim replacement, Seamus Creedon, admitting that LV= shareholders had sent the board a “message” by voting down the Bain Capital deal.

“We felt it right to take time to understand the message members gave the board. Put simply, our members told us that what they viewed as the modest financial advantages of the transaction, were not worth the loss of ownership and voting rights for our million-plus members,” said Creedon.

“We share a common interest with Royal London in a healthy and vibrant mutual sector so that we can both compete fairly with shareholder-owned firms,” he continued, confirming that the firm is engaged in continued discussion with Royal London about a possible merger.

The new round of talks marks the second time that Royal London has made a play to win over LV= investors.

The 179-year-old mutual insurer previously declined an offer by Royal London, arguing that a deal with Bain Capital offered greater assurances to protect the jobs of some 1,000 employees in the South West, even though Royal London offered £10m more than Bain.

The Daily Mail launched a campaign to oppose LV= from being snapped up by a US owner, with politicians from across the political spectrum, from Labour’s Ed Miliban to the Conservative’s Lord Hestletine lending their support.

LV= rival Royal London took the opportunity to stir the pot by revealing the generous terms of its takeover offer and making the Bain acceptance all the more difficult to justify.

While Royal London noted there is no guarantee that current discussions will result in an offer the company said that “if the merger goes ahead, the bringing together of the companies will result in a “growing, well-capitalised, modern mutual.”