So farewell Mark Hartigan. Whatever one might think of the former army colonel’s leadership at LV, he is not a quitter.
Reading the departure announcement from the company, one might think that Hartigan was the most impressive insurance boss who ever walked the earth.
He claims to have taken a failing mutual focused on mass market offerings, and replaced it with a model which builds family resilience.
Reading the departure announcement from the company, one might think that Mark Hartigan was the most impressive insurance boss who ever walked the earth
If this strategy was so wonderful, one questions why the boss – with a liking for tight, pinkish cord trousers – was intent on selling the mutual insurer to private equity baron Bain Capital for £530million.
In so doing, he disregarded the better interests of 1m or so LV members, rather than taking the company forward to ever greater things.
It wasn’t a shortage of capital. LV passed go and picked up £1.1billion when it sold its car insurance arm.
Indeed, if the issue had been one of capital, it couldn’t subsequently have told its potential mutual partner Royal London to take a hike.
Hartigan has argued he would not have received any personal benefit from the Bain sale.
It was always the case that he would be moving with LV to the new ownership and doubtless become part of the gravy train of share options and carried interest which have made so many people making the journey from public to private richer than Croesus.
Hartigan suffered a humiliating setback when the members refused to back his private equity plan in December after a sustained campaign by this paper to keep LV mutual.
The honourable thing would have been to resign immediately. Instead, he has remained in post and a pusillanimous board decided, that in spite of the zig-zags, to hand him a £511,000 bonus.
That’s a bit better than the £100 he was preparing to pay out to members for a mess of pottage.
Even now that new chairman Simon Moore has given the chief executive the heave-ho, he is hanging on as interim boss.
It is as if, despite Hartigan’s self-certified, terrific management, there is no internal candidate capable of taking over. He will continue to be paid, and don’t discount further bonuses.
There are some positive outcomes from this saga. Even the most entrenched deals can be undone with member or shareholder power.
And new legislation, due to be considered in the autumn, could make it easier for firms in mutual ownership to raise capital without selling their soul.
The question which will plague Haleon as it assumes its FTSE top-20 status on the London Stock Exchange is: Why did it scupper the £50billion trade sale offer from Unilever?
With a first day trading valuation of just under £30billion and an enterprise value of £40billion (including debt), investors could feel short-changed.
As a pure-play healthcare group selling Sensodyne, Centrum and Advil, the newly quoted firm is blazing a path which others – including Johnson & Johnson – are planning to emulate.
Seen in a wider context, the arrival of Haleon must be a good thing. It demonstrates the London market is capable of handling big transactions.
A shadow over the share price is the intention of both former parent GlaxoSmithKline and minority partner Pfizer to run down their rump holding, worth some £12.5billion, when the lockout (which prevents share sales) ends in November.
GSK chief executive Emma Walmsley should be applauded for sticking to her guns. In contrast to Vodafone – which chose to float its ‘towers’ infrastructure offshoot in Frankfurt – the pharma group stuck with London.
This is just as well when the lower reaches of the FTSE are under siege from private equity and US competitors, with Ultra Electronics, Meggitt and Inmarsat on the endangered list.
It would be great to think that the Haleon float might open the eyes of Softbank chief Masayoshi Son to a City revival for Arm Holdings. Don’t count on it.
A British successor to the current generation of fighter aircraft will be crucial, not just to UK defence but also the country’s leading-edge aerospace industry.
Word that an early version of the leading-edge BAE Tempest combat fighter, to which £2billion of government funding has been committed, could be in the skies by 2027 is encouraging.
At a time when Nato defence spending is climbing, it could provide an excellent export opportunity.