RUTH SUNDERLAND: Small savers could tell they were being sold a pup in LV deal

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Perhaps it doesn’t tug at the heartstrings quite like It’s a Wonderful Life – the classic Christmas film starring James Stewart as the manager of a mutual savings firm.

But the triumph of ordinary customers at LV over the powerful forces of private equity is still a good reason to celebrate the festive season a little early.

It now looks likely that one of this country’s oldest and best-loved mutual insurers will retain that cherished status, instead of being thrown to the private equity wolves for the gratification of its self-serving bosses.

While so many businesses and families have battled to stay afloat financially during the pandemic, it has been a golden period for private equity.

Companies including the supermarket group Wm Morrison have fallen into the clutches of buyout barons. 

The predators have swooped on some of the UK’s most important businesses virtually unhindered – until now.

Big City shareholders have almost always failed to put up much of a fight. They prefer to pocket quick gains from a sale, regardless of the consequences for employees, customers or the economy as a whole.

And bosses of target companies are often all too eager to sell out to private equity as it means they will be in line for large personal gains – as was the case at LV.

So it is heartening to see small savers ready to stand up for mutual values.

Throughout the sale process, LV’s so-called leaders have treated their policyholders with sheer contempt. 

They gave every impression of hoping the deal would go through on the nod, due to apathy or passive acquiescence on the part of what they seemed to assume to be sheeplike savers. 

If this was the case, they did not bargain on the shrewdness of their own members who, although the turnout was low, came out in sufficient numbers to thwart their plans.

The LV policyholders who voted against Bain may not be financial experts – but they can tell when they are being patronised and sold a pup.

From the start of the attempted sale to the bitter end, chairman Alan Cook and chief executive Mark Hartigan conducted the process atrociously.

Important information was withheld and disclosed only grudgingly under pressure, or tucked away in long documents where it was hard to find.

Transparency and respect, two key mutual principles, were sorely lacking.

This attitude persisted to the last gasp.

The media were even barred from the final online meeting yesterday. This was despite there being a clear public interest and the fact it is common practice for companies to admit reporters on such occasions.

Hartigan and Cook never convincingly explained why they rejected a bid from fellow mutual Royal London, which many members would have preferred.

The two mutuals are now in discussions about a fresh offer. 

That looks like a positive development but mutuality in itself does not give anyone a free pass and this newspaper will be watching like a hawk to make sure Royal London’s new bid serves the interests of LV savers.

This is a moment of victory for campaigners, politicians and above all for the LV savers who voted down the deal.

As for Messrs Cook and Hartigan, they should put It’s a Wonderful Life on repeat over Christmas. 

Maybe if they watch it enough times, they might absorb some of its mutual spirit.

Victory for the Mail as £530million LV deal is blocked: Chairman quits after mutual’s members reject takeover by US private equity sharks

Lucy White and Archie Mitchell for the Daily Mail 

Members of historic insurer LV yesterday voted down the firm’s controversial £530million takeover by a US private equity shark.

The 1.2million policyholders, who together own the 178-year-old firm, rejected the takeover attempt by Bain Capital in a victory for the Daily Mail.

Just minutes after the results were announced, LV’s chairman Alan Cook – who had been central in trying to push the deal through – said he would step down.

Critics of the deal were also calling for the removal of chief executive Mark Hartigan – a former army colonel who kicked off the sale process just weeks after joining the insurer at the start of last year.

The vote from LV members to keep the firm, once known as Liverpool Victoria, out of Bain’s grip came as a victory for the Mail. 

This paper has campaigned to stem the tide of ‘pandemic plundering’, as private equity firms have scoured the UK for undervalued companies which they can snap up and wring for profits.

A buyout of LV by a private equity firm would have been particularly distasteful, since the life insurer is a mutual – meaning it is owned by its members and can be run entirely for their benefit.

This dates back to LV’s birth in Liverpool in 1843 when it began selling ‘penny policies’ to help the poor bury their loved ones with dignity.

But private equity firms buy businesses to squeeze them for cash. They are notorious for cutting jobs, slashing costs and hiking prices – and LV members were worried that their policies and services would suffer. 

The firms have won control of businesses from Morrisons to the AA to G4S since the pandemic hit, as major City shareholders have caved in to the buyout companies and taken their money.

MPs, experts and campaigners praised the rebuttal of Bain. Tory MP Kevin Hollinrake said: ‘This is a huge win for the Parliamentary group on mutuals and the Daily Mail, who exposed one scandal after another. 

This sends a message to private equity plunderers to keep their hands off beloved British companies. 

One of the main reasons it happened is because members were given a say, not big City institutions looking to make a killing.’

Labour MP Dame Margaret Hodge added: ‘If there had not been a really strong campaign in which the Daily Mail played an instrumental role, I think people would have had the wool drawn over their eyes and that is scary.’ 

And Tory grandee Lord Heseltine said members’ ‘long-term commitment to the company has repelled the short-term opportunism of the break-up businesses’.

LV is now weighing up whether to enter into discussions with fellow mutual Royal London, which bid against Bain last year. It has tabled a bid which would see LV’s members become part owners of the entire enlarged firm.

Of the 15 per cent of LV members who turned out to vote, 69 per cent waved the deal through. But this fell short of the 75 per cent needed to strip LV of its mutual structure.

It is the latest blow for Mr Cook, 68, whose career has been riddled with scandals.

He was chairman of Irish lender Permanent TSB and had to apologise to 1,400 victims who were overcharged on their mortgages. 

And he was managing director of the Post Office between 2006 and 2010, when 161 postmasters were wrongly prosecuted. 

Mr Cook will remain chairman of LV until a ‘way forward is agreed’.

RUTH SUNDERLAND: Small savers could tell they were being sold a pup and came out in sufficient numbers to thwart LVs plans

By Ruth Sunderland for the Daily Mail 

Perhaps it doesn’t tug at the heartstrings quite like It’s a Wonderful Life – the classic Christmas film starring James Stewart as the manager of a mutual savings firm.

But the triumph of ordinary customers at LV over the powerful forces of private equity is still a good reason to celebrate the festive season a little early.

It now looks likely that one of this country’s oldest and best-loved mutual insurers will retain that cherished status, instead of being thrown to the private equity wolves for the gratification of its self-serving bosses.

While so many businesses and families have battled to stay afloat financially during the pandemic, it has been a golden period for private equity.

Companies including the supermarket group Wm Morrison have fallen into the clutches of buyout barons. 

The predators have swooped on some of the UK’s most important businesses virtually unhindered – until now.

Big City shareholders have almost always failed to put up much of a fight. They prefer to pocket quick gains from a sale, regardless of the consequences for employees, customers or the economy as a whole.

And bosses of target companies are often all too eager to sell out to private equity as it means they will be in line for large personal gains – as was the case at LV.

So it is heartening to see small savers ready to stand up for mutual values.

Throughout the sale process, LV’s so-called leaders have treated their policyholders with sheer contempt. 

They gave every impression of hoping the deal would go through on the nod, due to apathy or passive acquiescence on the part of what they seemed to assume to be sheeplike savers. 

If this was the case, they did not bargain on the shrewdness of their own members who, although the turnout was low, came out in sufficient numbers to thwart their plans.

The LV policyholders who voted against Bain may not be financial experts – but they can tell when they are being patronised and sold a pup.

From the start of the attempted sale to the bitter end, chairman Alan Cook and chief executive Mark Hartigan conducted the process atrociously.

Important information was withheld and disclosed only grudgingly under pressure, or tucked away in long documents where it was hard to find.

Transparency and respect, two key mutual principles, were sorely lacking.

This attitude persisted to the last gasp.

The media were even barred from the final online meeting yesterday. This was despite there being a clear public interest and the fact it is common practice for companies to admit reporters on such occasions.

Hartigan and Cook never convincingly explained why they rejected a bid from fellow mutual Royal London, which many members would have preferred.

The two mutuals are now in discussions about a fresh offer. 

That looks like a positive development but mutuality in itself does not give anyone a free pass and this newspaper will be watching like a hawk to make sure Royal London’s new bid serves the interests of LV savers.

This is a moment of victory for campaigners, politicians and above all for the LV savers who voted down the deal.

As for Messrs Cook and Hartigan, they should put It’s a Wonderful Life on repeat over Christmas. 

Maybe if they watch it enough times, they might absorb some of its mutual spirit.