Business secretary Kwasi Kwarteng tells LV= to reveal fees from £530m Bain takeover
Mutual insurer Liverpool Victoria (LV=) has been urged by the business secretary to disclose how much City firms will take home from the £530m proposed takeover by US private equity firm Bain Capital, amid increasing scrutiny from members.
In parliament yesterday Kwasi Kwarteng said “transparent data” should be provided for LV= customers about how much bankers, lawyers and lobbyists stand to make from the proposed sale of the mutual insurer to Bain Capital, which would end the firm’s member-owned status.
Labour MP Gareth Thomas, chair of the all-party parliamentary group for mutuals, today told CityAM that LV= “should publish the bid and the tender documents from Bain, and from Royal London, in full, and let members look.”
“This is money that’s been invested by British families for their retirement,” Thomas explained, “and they’ve got a right to expect Liverpool Victoria to manage that money in an effective and an honest way and not revealing how much they’re paying for all this doesn’t seem to sit with this.”
FTI Consulting, according to reports, is one of the companies which stands to benefit from the deal but has come under scrutiny after The Times reported a possible conflict of interest. FTI Consulting has been employed for public relations advice even as one of its managing directors is set to be involved in an independent review of the deal.
It has also been noted that the investment bank working with LV=, Fenchurch Advisory Partners, is headed by Malik Karim, treasurer of the Conservative party.
Chief executive Mark Hartigan has so far declined to reveal how much the mutual insurer, which is legally owned by around 297,000 with-profits policyholders, is spending on its advisers.
An LV= spokesperson said: “As a mutual we are keenly aware of our responsibility to members’ money. We competitively tendered for all advisory aspects of the transaction. The fees are commensurate with other transactions of this size and complexity.”
The news comes amid rising tensions as the proposed takeover deal of LV= has come under increased scrutiny after the mutual insurer announced that its members would receive just £100 each from the £530m sale to Bain, which will end LV’s status as a mutual after 178 years.
The mutual’s 1.16m members will vote to approve or reject the Bain deal on December 10 – three quarters of the votes are needed for the takeover to go ahead.