The All-Party Parliamentary Group for Mutuals [APPG] has today released a new report into the planned demutualisation of LV=.
LV=, one of Britain’s biggest financial mutuals, founded in 1843 and trading for most of its life as Liverpool Victoria, is well known across the UK.
In December 2020 LV= announced that it had reached an agreement on the terms of a sale to Bain Capital, a leading U.S. private investment firm specialising in Private Equity.
The APPG, which has over one hundred members from both Houses of Parliament, found that:
- It is very difficult for an individual member of LV= to be able to assess whether the demutualisation proposal is in their interests or not.
- On the basis of the evidence available to us, the Group concluded that the Leadership at LV= has not been open and transparent with the members about its intentions for the company.
- The fact that the board will move ahead to conclude a deal with Bain Capital in advance of providing any meaningful information to its membership shows a disregard for the interest of members and a cavalier attitude towards the member governance of this business.
- The planned demutualisation damages the diversity of financial services providers in the UK and weakens the mutual sector unnecessarily.
- Regulatory authorities do not appear to have so far acted fully in the interests of members, consumers and the wider economy.
APPG Chair, Gareth Thomas MP, said “What’s clear from the Group’s findings is that this demutualisation, like those before it, appears to be wholly unnecessary. We know from past experience that demutualisation is bad for members, customers and for the economy more widely. LV=’s planned sale to Bain Capital appears to be following the same pattern. The report finds that LV= has been unclear in its communication to members about its commitment to mutuality, the future business plan and the need for capital. At the very least LV= should now engage directly with members to explain the rationale for demutualising.”
Mutuo provides secretariat to the APPG for Mutuals. Find out more here.