LV= chairman Alan Cook is to step down after a £530m recommended deal by a US private equity firm to take over the mutual failed to win enough support from LV= members. 

The acquisition by Bain Capital, recommended by the LV= board, failed to get enough support from LV= members in a crucial vote today.

Bain needed to win 75% of voting members to seal the deal to take over the mutual provider but only achieved 69%. 

The vote sends LV= back to the drawing board.

Critics had argued that the Bain Capital takeover was not in the best interests of LV= and redundancies were possible. 

LV chairman Alan Cook said in a letter to members today after the vote: "69% of our 1.16 million members voted in favour of the transaction. Despite this strong endorsement, we did not achieve the required 75% threshold for the vote to pass. This means that the transaction with Bain Capital will not proceed.

"Although 69% of voting members supported the Board’s recommendation and voted in favour of the transaction with Bain Capital, we are disappointed not to have achieved the outcome that we believed was in the best interests of LV= and its members. The Board remains committed to finding a solution to the challenges presented by a declining with profits membership base and following the outcome of today’s vote, and to reduce uncertainty, the Board of LV= will move swiftly to reassess its strategic options and explore alternative ways to structure a transaction that will provide the best long-term outcome for our members, business, employees and wider communities."

"I will continue to lead the Board, and I am committed to finding the best deal for members, however I would also like to confirm that as soon as a way forward is agreed, I intend to step down as the LV= Chair. LV= today continues to have an appropriate capital position and we will continue to trade as usual, with no impact on customer policies or business as usual activity."

A spokesman for Bain said today: "We were invited by the Board (of LV=) into this process and out of 12 bids the Board unanimously selected ours as the best offer in December 2020. Whilst approximately 70% of LV='s members voted for our proposal, we respect this outcome is not enough for our transaction to proceed.

“Our proposal for LV= was deemed to be the best for members, enabling LV= to grow, reduce its debt and maintain its proud heritage. It remains crucial that members are looked after and protected. We have always wanted LV= to flourish and become a leading company in the sector, that offers more consumer choice and creates more jobs."

LV= had said during the bidding process that business as usual was not an option for LV= as it needed £100m in investment. LV= is currently burdened with debt and large pension liabilities.

LV= said there were 12 bidders, including Bain, who expressed an interest in buying the business.

LV= announced a controversial acquisition by Bain in December but has faced resistance. 

The LV= strategic review concluded that LV= was a sub-scale, life and pensions business with an insufficiently strong capital structure and a loss-making new business unit, in need of investment.

Rival provider Royal London has expressed an interest in acquiring LV= but has been rebuffed so far by LV=.

LV= members were set to receive a share of £111m in one-off payments should the deal with Bain have gone ahead via a Part VII transfer. This type of insurance business transfer scheme requires backing from a court hearing and members voting in favour.

Alongside the proposed £111m payment to members, Bain also projected £101m of “policy payout enhancements” for members. Total payments to members under the deal could be £212m.

Bain had committed to spending £160m on IT modernisation, business operational improvements, product development and customer service funded from operating cashflows for LV=.

• This is a developing story. Check back for updates.