Virgin Money takeover to create big challenger
The owner of Clydesdale and Yorkshire banks is expected to raise its offer for Virgin Money within days.
The owner of Clydesdale and Yorkshire banks is expected to raise its offer for Virgin Money within days in a move likely to create Britain’s biggest challenger bank.
CYBG approached Virgin earlier this month about a takeover that would create a bank with assets of about £70 billion ($125bn) and more than six million customers.
The all-paper offer was for 1.1297 new CYBG shares for every Virgin Money share. A sweetened deal, possibly with a cash component, is thought to be under consideration.
Virgin Money’s shares closed on Friday at 341.7p, marginally below the price on the day the approach was confirmed to the stock exchange. The stock had jumped 25 per cent in the previous weeks amid takeover rumours.
CYBG has until 5pm on June 4 to make a formal bid, otherwise it will have to walk away for six months. Besides price, there seem to be few obstacles to a deal. Jayne-Anne Gadhia, Virgin Money’s chief executive, is expected to depart, leaving CYBG boss David Duffy to take the reins of the enlarged company.
CYBG’s strength in current accounts and business banking would meld with Virgin’s scale in mortgages and credit cards. A merger could see about 1000 job cuts. The two companies declined to comment.
The Times