ALEX BRUMMER : Royal London fights for LV and its promise to keep the insurer mutual

The battle that has been unleashed for control of LV and the mutual insurer’s 1.2m policyholders is an unedifying spectacle.

The controversial Chairman Alan Cook and Chief Executive Mark Hartigan, both senior LV executives, were determined to force Liverpool Victoria members to accept an offer by Bain Capital. They have not been sincere with the members. 

Long-standing claims have been made that the offer of mutual consolidator Royal London to policyholders with LV With-profits would be less beneficial.

Offer: Royal London says it would be willing to preserve LV’s mutual status. The merger process would take longer in that members of both firms would need to vote the deal through

Offer: Royal London says it would be willing to preserve LV’s mutual status. Due to the fact that both companies would be required to vote for the deal, the merger would take longer.

Moreover, it is argued that under Royal London’s ownership, mutual status for LV members would have to be surrendered.

That is misleading, as Royal London says it would be willing to preserve LV’s mutual status. It would be slower because both the members and regulators would have to approve the merger.

The problem is not with the accusations and counterclaims, but that there’s no impartial arbitrator to verify what has been said.

The offer documents and audited forecasts are not available from both sides. There is no sighting of consulting and investment banking fees being paid to LV advisers Fenchurch. The standards are lower than in any other bidding tussle.

 It is shameful that when the savings of ordinary policyholders are at stake, the process is such a shambles. 

The fact that the Financial Conduct Authority has failed to act on the matter is incredibly frustrating.

It is important to remember that private equity and life insurance policies can be redeemed quickly. 

That’s why LV customers must reject the Bain deal, demand fresh leadership and seek a longer life for their savings with Royal London.

A strong arm

The difference between Theresa May’s government and Boris Johnson’s with regards to damaging overseas takeovers could not be more acute.

It is evident in the Culture Secretary Nadine Dories’ decision to open a competition and investigate national security concerns over the sale of Softbank to Arm Holdings, a Cambridge-based smart chip maker to Nvidia.

Had May and her timid team been more willing to place sand in the wheels of foreign takeovers, not only would Arm and its workforce have been saved the trauma of ownership uncertainty, but the UK’s defence and satellite capacity would not have been denuded by the sales of Cobham and Inmarsat.

GKN may have needed a shake-up but it could have avoided the ‘buy, improve and sell’ model at Melrose.

Simon Peckham and his team at Melrose may have done a fabulous job in refurbishing GKN’s auto and aerospace operations, but it will all be for nothing should the EV technology and sensitive aerospace tech end up in overseas hands.

Nvidia Arm’s deal with Arm is now under scrutiny by the UK, USA and EU.

Given the regulatory challenges and the delays, it would not be that surprising if even someone as ambitious as Nvidia founder Jensen Huang were to withdraw from the fray and think about spending the £30billion or so outlay committed to Arm on other investment choices. 

Masayoshi, Softbank’s mercurial boss, might think again after having given up his long-term ownership promises for Arm.

A London Initial Public Offering would bring Arm back into the public market, which is the best outcome for Britain and the UK’s future.

It would raise questions about whether London Stock Exchange can absorb a float on the size of Arm. This is far more than Glencore or The Hut Group, which was disappointing.

However, it was determined to make London the home of Aramco’s much larger IPO.

Reshoring Arm, and the valuable intellectual property it contains to the UK should be easy with willpower and determination.

Calls missed

There are many myths about the post-pandemic period. Thanks to Rishi Sunak’s furlough, the Office for Budget Responsibility forecast of 12 per cent unemployment could not have been more wrong as jobless queues shrink and vacancies surge.

Although the shortage of tanker drivers panicked motorists into waiting for hours in line, it was a mere nine-day miracle.

The predictions of the noise farming lobby that 100,000 pigs would need to be slaughtered and that there wouldn’t be any turkeys on Christmas Eve have also been proved wrong.

Let your voice be heard on LV 

We are encouraging LV members, customers, or others, who would like to see it retain its mutual status, rather than be bought out by private equity,  to write to it.

It is possible to use the words from the Daily Mail newspaper’s City Pages (photo here).

Below are the words that you can copy and paste in a letter. 

It can be sent to Alan Cook Chairman of LV= Liverpool Victoria, County Gates Bournemouth, BH12NF 

Dear Alan Cook,

I urge you, the undersigned to reconsider your decision of selling LV= to Bain Capital. Instead, keep it in its mutual status.