The Times - UK (2021-11-25)

the times | Thursday November 25 2021 2GM 45

Business

Ben Martin Senior City Correspondent

The members of LV= are expected to
foot a £43 million bill for the mutual in-
surer’s divisive £530 million takeover by
an American private equity firm.
LV= has refused to give details of the
fees it is paying to the City firms work-
ing on its sale to Bain Capital, a take-
over that faces a mounting backlash.
However, an estimate of the total
costs LV= will shoulder to complete the
deal has been included in a report
drawn up by Oliver Gillespie of Milli-
man, a consulting firm, who was hired
by the customer-owned insurer to act
as an independent expert and evaluate
the sale for the mutual’s members.
In a disclosure that until now had
gone unnoticed, Gillespie’s report said
“the transaction costs ... are estimated
to be £43 million”. Given that LV= has
about 1.16 million members, this
equates to about £37 per person.
A spokesman for LV= said the figure
encompassed all of its expenses asso-
ciated with the takeover, not just the
fees for bankers, lawyers and public
relations consultants.
Even so, the sum, which represents
8 per cent of the price LV= has fetched
from Bain, drew immediate criticism.
Peter Bloxham, an LV= member, said
it suggested “quite a feeding frenzy” for
advisers. Gareth Thomas, a Labour MP
who chairs the all-party parliamentary
group for mutuals, said: “It’s another in-
dicator that demutualisation leads to
great outcomes for advisers ... and
nothing like the same benefits [for] or-
dinary customers and members.”

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The introduction of short-term visas
will not solve labour shortages in the
food industry, the boss of Lidl has
warned, adding that the retailer was
working “harder than ever before” to
keep shelves stocked.
Christian Härtnagel, chief executive
of the German discount retailer’s UK
business, said that there were labour

Short-term visas won’t solve labour shortages, says Lidl boss

Louisa Clarence-Smith
Chief Business Correspondent

shortages “in every corner you look at

the moment”. The supermarket chain is

raising wages for its lowest-paid work-

ers, from £9.50 to £10.10 per hour out-

side London and from £10.85 to £11.30 in

the capital from March next year as it

battles with rivals to recruit staff.

Härtnagel, 39, said that only a long-

term visa policy would resolve Britain’s

labour shortages as the economy tran-

sitions post-Brexit. “Economies are

recovering across the globe. Why

would someone give up a job to come

over and they only have six months and

then they are running out of the visa?”

Boris Johnson used his Conservative

Party conference speech in October to

urge businesses to invest in staff and

said that restricting low-skilled migra-

tion would ultimately make the coun-

try more prosperous. The government

has offered short-term visas for lorry

drivers and poultry workers.

Lidl, which has about 880 stores in

the UK, has set a new target of reaching

1,100 stores across the country by 2025.

It employs more than 26,000 people

and said its expansion plan would

create up to 4,000 jobs. Lidl is Britain’s

seventh-biggest grocery store chain by

market share, according to Kantar, the

market research firm.

Härtnagel said he was unable to pro-

mise that customers would not see

higher prices as a result of the higher

staff, energy and transports costs faced

by the business. However, he said that

the retailer “will always offer the lowest

prices in the market”.

It had been hard to deliver goods for

Christmas, he added. A couple of weeks

ago, he was unsure whether there

would be enough turkeys, but supplies

have improved: “There’s no need to buy

a frozen turkey. If you want a fresh one,

you will be able to get one.”

He added that short-term visas had

Continued on page 47, col 1

City advisers to benefit in ‘feeding frenzy’

LV= to pay

£43m for

takeover

It adds to the furore surrounding the

transaction, which will result in the de-

mutualisation of one of Britain’s largest

remaining member-owned insurers.

Bournemouth-based LV=, founded

in 1843, is a leading provider of life

assurance and pension products. About

297,000 of its members are with-profits

policyholders who own the group.

All members will receive a £100 one-

off payment from the sale, while most

of its with-profits members will also

benefit from modest uplifts to their

policy payouts. They will vote on the

takeover on December 10, when LV=

needs the approval of 75 per cent of

those participating in the ballot.

Firms working with LV= include Fen-

church Advisory Partners led by Malik

Karim, treasurer of the Conservative

Party. Yet the sale has drawn criticism

from both Tory and Labour MPs and

peers. Kwasi Kwarteng, the business

secretary, said last week that it was “ab-

solutely right” LV= customers have

“transparent data” about advisers’ fees.

An LV= spokesman said: “This esti-

mated cost covers all aspects of the

transaction until completion, a period

of more than two years. This takes into

account the regulatory process, two

court processes, the member vote and

two independent experts as well as all

operational aspects, including the in-

ternal staffing of the transaction. The

total adviser fees are a smaller propor-

tion of this overall estimate.”

Advisory costs were “commensurate

with other transactions of this size and

complexity” and LV= will publish its

costs “in full at the end of the process”.

NATI HARNIK/AP

JP Morgan chief apologises for China joke

JP Morgan is racing to shore up its rela-

tionship with Beijing after it emerged

the boss of America’s biggest bank had

joked that the Wall Street giant would

outlast China’s Communist party,

writes Ben Martin.

Jamie Dimon raised eyebrows after

he made the quip in public at a business

forum in Boston on Tuesday. Western

business leaders usually tread carefully

when speaking about China for fear of

causing offence in Beijing.

The bank moved to contain the fall-

out from Dimon’s remarks yesterday

and issued two increasingly apologetic

statements from its chief executive.

In the second, more contrite, state-

ment he said: “I truly regret my recent

comment because it’s never right to

joke about or denigrate any group of

people, whether it’s a country, its lead-

ership, or any part of a society and cul-

ture. Speaking in that way can take

away from constructive and thoughtful

dialogue in society, which is needed

now more than ever.”

Dimon, 65, had been speaking at the

Boston College Chief Executives Club.

He said that JP Morgan hoped to be in

China “for a long time” and quipped: “I

made a joke the other day that the

Communist Party is celebrating its

100th year. So is JP Morgan. I’d make a

bet that we last longer.”

He added: “I can’t say that in China.

They’re probably listening anyway.”

JP Morgan has growth ambitions in

the world’s second-biggest economy. In

August, the New York-based group se-

cured approval from local regulators to

assume full control of its brokerage in

the country to become the first foreign

owner of a securities business in China.

The importance of the region to JP

Morgan was emphasised when Dimon

visited Hong Kong this month, his first

trip to the city since the start of the pan-

demic. The bank employs about 4,000

people there.

The swift apology from Dimon, who

has led JP Morgan since 2005, high-

lights the sensitivity with which West-

ern companies with business interests

in China treat Beijing.

Companies that have caused offence

in China have faced consequences. In

2019, an economist at UBS made com-

ments about swine fever; the Swiss

bank was then shut out of a bond sale

for China Railway Construction Corp.

Ploughing ahead John Deere, the US farm and construction equipment maker, has posted a record annual profit of nearly

$6 billion, more than double the $2.8 billion it earned previously, despite a five-week staff strike that ended last week