Now private equity firm leads the race for LV

LV is in exclusive takeover talks with private equity firm Bain Capital after snubbing an approach from rival Royal London.

The 177-year-old insurer, formerly Liverpool Victoria, said discussions with Bain are ongoing but there is no guarantee that a deal will go ahead.

But the firm’s 1.1m members are preparing for a windfall payout from the deal, which could value the insurer at more than £500m.

LV is a mutual, meaning it is owned by its members.

A sale to private equity will take the firm further away from its roots in Liverpool in 1843 when agents went door-to-door to collect penny premiums from the poor so they could leave something behind to cover the costs of their funeral.

LV’s board said the focus is on ‘maximising long-term value for its members and ensuring the business continues to be operated in their best interests’.

But the exclusive talks between LV and Massachusetts-based Bain will leave Royal London, which had not formally confirmed its interest, out in the cold.

Royal London has been expanding under the leadership of Barry O’Dwyer, who joined as chief executive last year.

Just this week it completed the acquisition of Police Mutual, which provides financial services to the police force and armed forces, and LV would have given the company a further boost.

Until last year, LV sold both life and general insurance such as cover for cars and homes.

But it is a much smaller business since selling its general insurance arm to Allianz for £1.3bn, in two stages, which completed last year.

Mark Hartigan, who joined as chief executive at the start of this year, kicked off a strategic review to assess whether members would be better off with a sale.