Mutual sale prompts windfall for thousands of investors
The firm said the deal would net eligible members of the mutual society who hold with-profits policies a share of a £9m goodwill payment.
The mutual society will close to new business when the deal completes allowing a distribution of the surplus capital over time to eligible members.
A new life company, financed by funds managed by TDR Capital, will continue to focus on the retirement income market trading under the MGM Advantage brand. It will also continue to service the closed mutual society.
As part of the transaction, £800m of annuity business risk will transfer to the new life company, improving the financial strength of the closed mutual.
Hargreaves Lansdown estimated MGM Advantage has about 19,000 policyholders and the deal should result in an immediate windfall to 15,200 eligible members, averaging about £592.
Those eligible for the windfall will receive a letter.
The deal is still subject to approval from members and from the Financial Services Authority.