Royal Liver puts Royal London takeover option to members

Insurer Royal Liver has put a possible takeover deal by Royal London on the table to members at the Groups' AGM.

The Liverpool-based mutual is reported to be edging towards an acquisition by life and pensions giant Royal London, and could be taken over by early autumn.

At Royal Liver's annual general meeting in Cardiff last week, a "possible transaction" with Royal London was put to the Group's 200 elected delegates who are reported to have been told by chairman David Woods the takeover would be in the interests of policy holders.

A spokesperson for Royal Liver confirmed a deal had been presented to delegates, but no vote on the issue was taken.

She says: "If the talks with Royal London progress to a point that it becomes necessary to put the transaction to a delegate vote, this will take place at a Special General Meeting later in the year."

The two parties held talks three years ago but Royal Liver ended discussions just a few months later, having opted to retain its independence.

If the merger comes to fruition the enlarged group would have assets of more than £33bn and almost six million customers.

A deal can only take place with Royal London if 75% of Royal Liver's members vote for it at a special meeting.

Royal Liver has been hit hard by the recession and has been undergoing a restructuring since last year as it bids to cut losses.

Park Row, the IFA arm of the Royal Liver Group, was wound up and closed last November after the company posted a turnover of £4.3m to the end of June, less than 70% of its anticipated budget.

A band of 28 ex-Park Row advisers are considering legal against against their former employer for "breach of contract", as many have been left without the permission to advise clients following an FSA investigation at the firm during its wind down.

Park Row was subject to an FSA investigation in which the regulator found the firm had failed to ensure its sales were suitable, and ordered it to pay redress to customers of up to £7.8m.

In addition, it fired finance director George McGregor for serious breaches of duty last month.

A spokesperson for Royal Liver says: "The AGM [was] attended by 200 elected Delegates...[who] represent the interests of the Society's 1.5 million members.

"One item discussed was the current talks with Royal London concerning a possible transaction.

"There was no vote concerning this item as the talks continue and there is no certainty that they will lead to a proposal being put to the Delegates or a potential transaction.

Royal Liver Assurance this week confirmed plans to sell off its six Irish insurance brokerages after its Irish advisory division suffered losses of almost €18m last year, the Irish Times reports.