The chief executive of the mutual insurer LV= has said a controversial proposed £530m “takeover” by US investor Bain Capital is the only deal on the table that will protect about 1,000 jobs in the South West.
Mark Hartigan, in an interview with Business Live in the South West, said Bain is the only prospective investor which has given guarantees to keep open LV=’s three UK offices: in Bournemouth, Exeter and Hitchin.
About 700 people work in the Bournemouth head office, and about 275 in Exeter, with a similar number in Hitchin, Hertfordshire.
Mr Hartigan said he understands the “anger” brewing around the 178-year-old business’ loss of mutual status should the Bain deal go through.
But he insisted it was the only one that protected jobs, secured the company and was likely to see investment to allow it to grow.
He told Business Live: “It is the best financial deal for members and the only deal that makes a commitment for the three sites we operate.
“It is the only deal that makes a future for our brand and people and will invest hundreds of millions of pounds to secure it.”
Directors at the mutual, formerly known as Liverpool Victoria, have advised its 1.2million members to approve the offer from Bain with a vote closing on December 10, 2021.
LV= has said that under the proposed deal Bain will invest £212m and hand out £533m to 271,000 LV= with-profit members over time.
Eligible non-with-profit members would receive £100 one-off payments from the proposed deal, which Mr Hartigan stressed is not a “takeover” but a “financial investment”, while 297,000 eligible with-profits members, with long-term investment products and who effectively own the group, could receive enhanced payouts of an extra £52.
But the Bain deal, one of 12 potential bidders, would mean LV= losing its mutual status, and Mr Hartigan said: “I understand the anger of demutualisation.”
But he insisted the Bain deal was the only way to save a business that had lost market share for five straight years and needs future investment.
He wouldn’t be drawn into naming another potential suitor, widely reported to be fellow mutual Royal London, but said the difference between a rival bid and Bain’s proposal is that there would be “no commitment to Exeter” and added: “They have not come out and said, like Bain have, that they need these jobs to grow the business.”
Mr Hartigan said he had received little support from MPs in the areas where LV= has offices and said there had been “narrative of disinformation” from certain media outlets and said that if the Bain deal is not voted through the “losers” will be with-profit members and “out dear staff”.
He praised the company’s staff as “wonderful” and said: “I have to look after my cohort of with-profit members, and this great British company which is at risk of going under if the Bain deal does not go ahead.”
He said that with the closure of the vote, which requires 75% support to be approved, approaching: “Time is running out to save our future.”
