(Alliance News) - Nationwide Building Society on Thursday said that it had finalised terms for its acquisition of Virgin Money UK PLC, and set out the details of the deal set to create "the second largest provider of mortgages and savings in the UK".
In early March, Nationwide reached a preliminary agreement with Virgin Money to acquire the financial services firm for 220 pence per share, comprising 218p and a 2p dividend, and equating to a total valuation of GBP2.9 billion. This represented a 38% premium to the Virgin Money's closing price of 159.05p the day before the offer.
Virgin Money's Chief Executive David Duffy called the proposal an "exciting opportunity", which would expand the company's customer offering "and complete our journey in the banking sector as a national competitor".
The pair have now agreed to the acquisition on the original terms. The scheme expected to become effective in the fourth quarter of 2024.
Nationwide said that the acquisition is conditional on a 75% majority of Virgin Money shareholders voting in favour. The directors of Virgin Money intend to unanimously recommend that shareholder vote for the scheme at a court meeting, scheduled for April 19. Nationwide said it has so far received commitments from around 14.6% of Virgin Money shareholders.
Nationwide said that the deal "will combine two complementary businesses, creating the second-largest provider of mortgages and savings in the UK", behind the Lloyds Banking Group.
The company said that the addition of Virgin Money's banking and financial services "will enable Nationwide 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 Nationwide's financial strength".
Following completion, Virgin Money Chief Executive Officer David Duffy will step down, with Nationwide Chief Financial Officer Chris Rhoades taking on the position.
Shares in Virgin Money were up 2.5% at 212.90 pence each in London on Thursday morning.
By Hugh Cameron, Alliance News reporter
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