THE boss of LV= has accused a competitor of lobbing a “hand grenade” into plans to sell the business for £530million.

The chief executive of Royal London, which had offered more money for the County Gates-based insurer, yesterday issued a plea for LV= to talk about a deal.

But LV= chief executive Mark Hartigan criticised the intervention as an attempt to derail the sale to US private equity fund Bain Capital, weeks ahead of a vote by members.

LV= said Royal London’s £540m offer would see the business split up and result in redundancies and possible closures among its three sites in Dorset, Exeter and Hitchin.

Mr Hartigan told the PA news agency the latest proposal was a “hand grenade to disrupt the process”.

He said: “Royal London had every opportunity to offer a better deal than Bain and they didn’t.”

He added: “They made very clear that the success of their bid relies on synergies and that means redundancies.

“They don’t need the brand and didn’t give us support for the sites.”

He added: “Believe me when I say that this is the best and only deal that saves the future of LV=.”

He said the 1,400 staff at LV= were “extremely worried that the deal we are asking members to vote on is being undermined”.

“I’ve got an employee base that’s very anxious,” he said.

“It’s important to remember why we’re doing this – it protects people’s livelihoods.”

LV= revealed the financial details of Royal London’s original approach, confirming the group was offering £540m. 

Like LV=, Royal London is a mutual society owned by its members, but LV= claimed a sale would lead to demutualisation.

LV=’s customer members would receive £100 each if the sale to Bain Capital goes through.

Earlier, Royal London chief executive Barry O’Dwyer told BBC Radio 4’s Today programme that his business returns around a third of its charges back to its pension customers in refunds each year.

“No other company does that and certainly it’s really difficult, I think, for LV= members and observers to believe that a US private equity company is going to safeguard member benefits and UK jobs more than a UK mutual does. I just don’t’ believe that that’s credible,” he added.

A statement from Royal London said: “Royal London has long wished to find a way to combine the UK’s two biggest insurance mutuals, in order to deliver the best long-term value for our respective members.

"We do not want to break up LV= and would be delighted if the LV board would engage in discussions. 

“Our recent email to LV recognised that they have signed a contract with Bain Capital which we believe would preclude them from having bilateral discussions with Royal London and so we proposed a three-way conversation between Royal London, LV and Bain Capital.”