“We have noted references in the press regarding the relative size of the £100 one-off payment for all members under the proposed transaction with Bain Capital compared to other precedent demutualisations,” LV said.
“This is a misleading comparison. The total return to 271,000 LV= with-profit members following both the sale of the general insurance business and the transaction with Bain Capital is £533m over time.
“Consistent with precedent demutualisations, with-profit members are receiving the greatest portion of the distributions with non-profit members receiving a fixed payment upfront.”
The sale of LV’s general insurance business between 2017 and 2019 was necessary, according to the mutual, “to bolster a weak capital position” - in line with the 2020 strategic review which followed.
In total, LV estimates total capital to be returned to all members over time will be £616m, which comprises £212m from the Bain deal, and £404m from the remaining proceeds of the sale of its general insurance business.
Ahead of LV’s member vote next month, MPs will this week be discussing the future of mutuals.
According to the Treasury Committee, MPs may question witnesses on the implications of LV’s proposed sale to Bain Capital, and whether there could be a wider impact on the market.
The latest details follow LV’s breakdown of why Royal London’s bid for the insurer late last year fell short of Bain Capital’s £530m takeover.
ruby.hinchliffe@ft.com
