Royal London chief in final bid to win backing for Co-op deal
Monday 03 June 2013
The head of insurance group Royal London has made a last-minute plea to its members over the company's planned £219m takeover of the Co-operative's life insurance and asset management unit ahead of a key vote tomorrow.
Phil Loney said the deal would be "transformational", and defended Royal London's ability to absorb such a large acquisition.
The takeover, which is expected to be approved by Royal London's 500,000 members at the annual general meeting in London, will provide a much-needed cash injection for the troubled Co-op, which has a capital shortfall that analysts have suggested could be as high as £1.8bn.
The Co-op last week turned to former HSBC banker Niall Booker to steer its banking arm back to health. Mr Booker replaced Barry Tootell, who stepped down as chief executive of the Co-operative Bank in May after its debt rating was cut to junk status by Moody's.
Mr Loney told The Independent that the Co-op's problems had no bearing whatsoever on his company's deal.
"If approved, the acquisition will increase our assets under management from around £50bn to around £70bn, the number of policies we manage will rise from 6.8m to more than 10m, and our overall customer base will increase from 4 million to around 6 million," he said.
"We are already a strong player in the life and pensions market and in fund management but the impact of this acquisition on our business will be transformational and create opportunities to increase our scale, profitability and financial strength."
On Friday, ratings agency Standard & Poor's upgraded Royal London's credit rating, and Loney hinted that the Co-op deal is unlikely to be the last of its kind.
He added: "We have a very strong financial profile and a competitive position in the market – as reflected in our credit upgrade to A from S&P. This gives us a powerful and stable platform to achieve organic growth and to make strategic acquisitions.
"We have a strong track record in acquiring and successfully integrating businesses. We are performing strongly, and I believe the prospects for our business remain positive."
Meanwhile, it has emerged that investors holding up to £370m in Co-op corporate bonds may be at risk of suffering a substantial financial loss. Most of the bonds are held by other financial institutions but at least £30m is believed to be in the hands of private investors. An almost inevitable restructuring of the Co-op's finances could lead to bond holders losing all or part of their investment.
- 1 Vladimir Putin says Russia will fight for the right of Palestinians to their own state
- 3 Germanwings plane crash: I have depression. That doesn't make me a psychopath
- 4 The West has it totally wrong on Lee Kuan Yew
- 5 The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat
Vladimir Putin says Russia will fight for the right of Palestinians to their own state
Ohio Democrat Teresa Fedor speaks out during abortion debate to reveal she has been raped – and is interrupted by laughter from Republicans
Germanwings plane crash: Investigators may have already found remains of suspected killer co-pilot Andreas Lubitz
Children take eight Isis captives to be beheaded in latest propaganda video
The battle for the Middle East's future begins in Yemen as Saudi Arabia jumps into the abyss
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
The West has it totally wrong on Lee Kuan Yew
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...