LV= has confirmed it received an unsolicited preliminary merger proposal from Royal London on 8 December 2021.

The firm said the proposal now includes the possibility of continued mutuality and is conditional on exclusive discussions.

This differs from the offer it received during the process in 2020.

The news comes as the takeover proposal from Bain Capital is rejected by members.

A spokesperson said: “The outline proposal from Royal London is at an early stage and is subject to discussion, due diligence and detailed negotiation of financial and other terms. There can be no certainty that a transaction will be agreed.

“The board will consider this proposal seriously and undertakes to update members as soon as practicable. In evaluating the Royal London proposal, the board will continue to have regard to members and stakeholders best interests.”

Royal London confirmed the move and said it envisages the terms of the merger would offer LV= members the option to become members of Royal London.

It said: “If the merger goes ahead, the bringing together of the best of both companies will result in a growing, well-capitalised, modern mutual.  It will provide UK consumers with a great customer-owned alternative to the rest of the insurance and long-term savings market, which is almost universally shareholder-owned.