(Sharecast News) - Citi downgraded its stance on Virgin Money on Monday to 'neutral'/high risk from 'buy'/high risk after the shares surged on news that Nationwide Building Society had offered to buy the group in a £2.9bn deal.
Under the terms of the offer, announced on Friday, Virgin shareholders would receive 220p per share. This comprises 218p per share in cash and a 2p dividend to be paid in FY24.
"Following Nationwide's announcement that it is considering a 220p bid for VMUK, we move our target price to 220p," Citi said.
The bank noted that final confirmation from Nationwide on whether it plans to pursue a bid is required by 4 April.
Citi said it reckons the offer is "fair".
It added: "The acquisition is not subject to the passing of a resolution by Nationwide's members and while we would expect the deal to be reviewed by UK Competition and Markets Authority, we think it is likely to close under the existing terms and perimeter."