Nationwide confirms £2.9bn bid for Virgin Money

Following the announcement of a potential deal earlier this month (March 2024), the boards of both businesses have agreed the terms of a recommended cash acquisition of the entire issued and to be issued share capital of Virgin Money by Nationwide.

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

The deal is expected to create the second largest provider of mortgages and savings in the UK.

The Nationwide board expects the acquisition to accelerate its strategy and broaden and deepen its products and services faster than could be achieved organically, whilst providing a return that will further support the society's financial strength and provide greater value to its customers and members.

Nationwide, headquartered in Swindon, emphasised that it valued Virgin Money's ongoing presence in Glasgow and Newcastle, and is set to maintain a presence there in the medium term. It intends to explore the scope for operational synergies through the simplification and optimisation of the combined group's office building.

The group said it values the skills and experience of Virgin Money's approximately 7,300 full time equivalent workforce. The workforce requirements of the combined group will be assessed as part of a review of Virgin Money following completion.

As part of a longer-term integration strategy, Nationwide intends for the Virgin Money business to re-brand over time.

Kevin Parry, chairman of Nationwide Building Society, 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."

David Bennett. chairman of Virgin Money UK, said: "The board of Virgin Money believes that this strategic transaction recognises the strengths and opportunities in our business. We're pleased to recommend the terms agreed with Nationwide, which deliver an attractive premium for our shareholders in cash and reflect the group's strong future prospects, combining two complementary businesses."

Nationwide Building Society is advised by Slaughter and May (legal adviser), UBS (financial adviser), FGS Global (public relations adviser). Virgin Money UK is advised by Clifford Chance (legal adviser), Goldman Sachs (joint Rule 3 independent financial adviser and joint corporate broker), J.P. Morgan Cazenove (joint Rule 3 independent financial adviser and joint corporate broker) and Teneo (public relations adviser).