(Sharecast News) - Virgin Money has formally agreed to be taken over by Nationwide Building Society in a £2.9bn deal.
The news on Thursday confirmed a preliminary agreement announced on 7 March.
Under the terms of the deal, Virgin shareholders will receive 220p per share, which is a 38% premium to the closing share price the day before the offer was announced. This comprises 218p per share in cash and a 2p dividend to be paid in FY24.
The acquisition will create a combined group with total assets of around £366.3bn and total lending and advances of approximately £283.5bn, representing the second-largest provider of mortgages and savings in the UK.
Virgin Money chairman David Bennett 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."
Russ Mould, investment director at AJ Bell, said: "After the miserable performance of Virgin Money on the market, shareholders might welcome the chance to get out at a small premium.
"You can never rule out someone else throwing their hat into the ring, but Nationwide is looking fairly comfortable for now with getting its offer over the line."