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ALEX BRUMMER: LV turning its back on Royal London is one of the most farcical boardroom U-turns in living memory
The reasoning behind the decision of Liverpool Victoria to pull out of a second round of merger talks with fellow mutual Royal London is unfathomable.
LV boss Mark Hartigan and outgoing chairman Alan Cook have spent much of the last year trying to convince sceptical policyholders, MPs and the media that the historic life company had no choice but to sell itself to survive.
It spent tens of millions of members’ funds, which could have augmented savings, on advice and legal fees. Now it acknowledges it was a waste of time because the insurer is doing so wonderfully well and can maintain its independent status.
Mystifying: After failing to convince its members to accept an offer from private equity giant Bain, LV has now abandoned a second round of merger talks with fellow mutual Royal London
The change is one of the most farcical boardroom reversals in memory. Disgraced chief executive Hartigan has shown enormous brass neck and disrespect to the reputation and traditions of a friendly society.
He led members and the City on a foolhardy and disingenuous campaign to place the fate of LV in the hands of private equity barons Bain Capital.
Now we learn that the rejected deal with Bain and a proposed link with respected mutual Royal London is unnecessary.
The scurrilous claim that LV couldn’t meet its long-term liabilities, having passed go and collected £1.1billion from the sale of its valuable car insurance enterprise, never stood up to scrutiny.
Hartigan, paid £1.2million in 2020, was so intent on leading the new LV, under Bain Capital ownership, he couldn’t see beyond his own wealth-making opportunity.
The chief executive has placed interim chairman Seamus Creedon in an invidious position. Creedon’s declaration that LV’s business performance and operational progress have made a deal superfluous is the equivalent of a U-turn on the M3 motorway heading towards Poole.
If Hartigan had a shred of honour he would resign immediately. In the absence of that, members should insist he is fired with immediate effect and no pay-off beyond minimal contractual requirements.
Life lines
Emma Walmsley fights on in her effort to restore Glaxosmithkline’s (GSK) status as one of world’s great life sciences firms.
The key to the chief executive’s strategy will be the separate listing of its cash-generative Consumer Healthcare arm.
Having turned down a handsome £50billion offer of a trade sale to Unilever, anything which places a lower value on it could be terminal for the current stewardship of the group.
So GSK’s fate rests heavily on market conditions in a volatile year in which interest rates are heading up on both sides of the Atlantic.
The prospects of the pharma and linked vaccine enterprise also look disappointing.
As one of the world’s leading vaccine makers it has made great breakthroughs for shingles and meningitis sufferers.
But the £1.4billion of Covid-19 sales (especially when compared to Pfizer and Moderna) are a profound disappointment.
Indeed, sales of its Covid treatment, xevudy, will make a smaller contribution in 2022 because of narrowing margins.
The departure of bioscience guru Hal Barron in August is also unhelpful.
GSK has a robust pipeline of medicines and vaccines coming to fruition including its transforming treatment for HIV, which could revolutionise the regime for patients.
And it is battling its way back into the oncology space unwisely abandoned by Walmsley’s predecessor.
It is critical for UK life sciences that Walmsley keeps activists at bay and gets good help from the Medicines and Healthcare products Regulatory Agency in the shape of smarter approvals.
What cannot happen is that GSK pharma is seen as too frail to stand on its own and falls into the hands of overseas predators.
Fresh challenge
So far I have avoided entering the new Amazon Fresh store on our high street, happy to pivot between a large Waitrose and a Tesco Express.
But we do use the Amazon Fresh delivery service (largely Morrisons produce) and shop for specialist items at Whole Foods.
The online shopping giant clearly seeks to rival established grocers so it is only right that the Competition & Markets Authority is insisting it complies with the suppliers code of practice only too easily abused, as was seen at Tesco in 2015.
For too long Amazon and the other digital giants have lived outside the bounds of anti-trust rules and national taxation.
It must end.
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