• Swindon & Wiltshire M&A, deals
• Thursday March 21 2024
• Author Name: Peter Davison

Nationwide confirms bid for Virgin Money – opening door for business banking

Building society Nationwide this morning (Thursday) confirmed its £2.9 billion takeover bid for Virgin Money.

Following an announcement earlier this month, the boards of both businesses have agreed the terms of a cash acquisition.

The purchase price of 220 pence per Virgin Money share values its share capital at about £2.9 billion.

The Swindon-headquartered lender, which has around 18,000 employees, said the “acquisition will create a financially stronger building society with returns that will deliver greater value to its members, including savings and lending rates that are, on average, better than the market average.”

And in an email to its members from chairman Kevin Parry, the mutual said the move would allow it to offer business banking.

“For a while, we have considered how to extend the benefit of our mutual model to include business banking. This acquisition will bring the established business banking services of Virgin Money within the Nationwide Group. In the long term, we would make these, and accounts for clubs and charities, available to our members,” said Parry.

Nationwide has also extended its Branch Promise for a further two years. The promise means everywhere with a Nationwide branch will still have one in 2028. In many market towns – like Marlborough – Nationwide is now the last remaining banking facility.

The building society said that its Virgin Money bid was successful the Promise will also apply to Virgin Money branches, following the completion of any existing Virgin Money branch closure plans.

Virgin Money branches are found in the Midlands, North of England, and Scotland. It does not have any branches south of Northampton.

Nationwide CEO Debbie Crosbie said: “This acquisition strengthens Nationwide and means we can offer more value and broader services for our current and future members.

“More people will experience the benefits of mutual ownership and the customer-focused approach of a building society.

“This includes Nationwide’s unique Branch Promise, which we are extending until at least the start of 2028. The Promise will also apply to Virgin Money branches.”

Nationwide believes that the acquisition will enable Nationwide to accelerate its strategy and broaden and deepen its products and services faster than could be achieved on its own.

Kevin Parry, chairman of Nationwide said: “Following full consideration and the appropriate due diligence, and after taking comments from members into account, the Board of Nationwide’s assessment is that the binding offer to acquire Virgin Money is in the best interests of the Society and its present and future members.”

Nationwide has also confirmed that its chief financial officer, Chris Rhodes, will become the CEO of Virgin Money once the acquisition is complete and Virgin Money’s current CEO retires.

Muir Mathieson, Nationwide’s Deputy CFO and treasurer, will become CFO of Nationwide. Both appointments are subject to regulatory approval and will report directly into Debbie Crosbie.

The takeover would see the Virgin name phased out over six years. Its current owners are still paying Richard Branson’s Virgin Group millions of pounds a year to use the brand name.