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(Alliance News) - Nearly 1,000 people have signed a petition calling for Nationwide Building Society to give its 16 million members a vote over its decision to buy rival lender Virgin Money UK PLC in a deal worth around GBP2.9 billion.
The campaign organiser presented the petition at Nationwide's headquarters on Thursday as he called for other members to back the campaign.
Mikael Armstrong, who started the petition on change.org, criticised the lender for "rushing through a deal to fill the pockets of Virgin Money shareholders".
Nationwide is set to take over the smaller lender, which would create Britain's second-biggest savings and loans group.
It will also see it become a far bigger player in business banking and take on the old business of Northern Rock, which was nationalised at the start of the financial crisis before being bought by Virgin Money in 2012.
Sir Richard Branson's Virgin Group is set to net more than GBP400 million from the sale, as he still has a 14.5% stake in the bank – which he founded in 1995.
Nationwide is a member-owned financial institution, rather than being owned by shareholders like most UK banks, which means it is answerable to its customers who have bank accounts, savings and mortgages.
Nationwide's chief executive Debbie Crosbie said the deal "strengthens" the group "and means we can offer more value and broader services for our current future members".
But Armstrong is among the building society members to argue that the deal is not in the best interest of members.
"The board and management of Nationwide appears to be going to extraordinary lengths to rush through a deal to fill the pockets of Virgin Money shareholders with Nationwide members' capital, and without detailed due diligence and proper consideration at the expense of the society's members," he said.
"Nationwide members want – and must be given – a vote on the proposed takeover of Virgin Money. Denying the society's members, its own customers and owners, a vote on the deal is now an obscene show of arrogance."
Nationwide legally does not have to seek members' permission for such a takeover.
Nevertheless, its own rules state that it will call a special general meeting if requested by 500 members, who have been customers for two years and who each agree to pay a deposit of GBP50.
Armstrong created an email template through his "Give Nationwide members a say" campaign for those who are willing to demand a vote on the Virgin Money takeover.
He said a special meeting would "allow for a better understanding of the pros and cons of the deal and, after a suitable period of scrutiny, a member vote".
But he urged members to do so by the end of Friday, to avoid a "lock-out" period when the building society is no longer able to call a meeting.
A spokesman for Nationwide said: "Nationwide's board believes that the acquisition of Virgin Money offers compelling benefits for the building society's current and future members.
"Virgin Money profits retained by the Nationwide Group will improve the financial strength of our Society.
"This means we will be able to provide a greater level of member financial benefits and incentives, including through better savings and mortgage rates compared to the market average.
"Nationwide has communicated regularly and openly with its 16 million members, including several letters and emails.
"It has also conducted widespread polling of its members, which has shown very strong support for the transaction."
Shares in Virgin Money closed little changed at 215.22 pence each in London on Thursday.
By Anna Wise, PA Business Reporter
source: PA
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