Dramatic new twist as rival makes pitch to break up insurer LV

A ROW over the future of giant insurer LV has taken a dramatic twist after rival Royal London proposed a takeover that would see the company broken up.

The controversial pitch to the board of LV – a mutual owned by its members rather than shareholders – would see the insurer split with private equity giant Bain Capital. Royal London would take over many of the old LV policies, while Bain would spin off the rest of the brand into a separate business.

The deal, proposed in a secret email seen by The Mail on Sunday, throws new light on the intentions of Royal London which has so far emphasised the importance of LV retaining its mutual ownership.

It comes after the board of LV faced furious criticism for recommending a £530 million takeover offer from Bain.

LV has asked its members, who would receive £100 each under the Bain deal, to support the decision in a vote set for next month.

The deal has drawn fire from politicians from across the parties, including Lord Heseltine who said the payment represented ‘30 pieces of silver’ and urged members to reject the offer.

Critics have pointed at the merits of mutual ownership arguing that the 1.2 million LV members are being shortchanged for backing the deal.

The email, sent to LV chief executive Mark Hartigan, proposes ‘an early three-way discussion’ between Royal London, Bain and LV should it become clear that LV members will reject the proposal.

Talks between the three firms would ‘consider if the current proposal could be enhanced in order to be more attractive to your members’, the email states.