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Virgin Money receives £1.6bn takeover offer


Clydesdale and Yorkshire Banking Group (CYBG) has made a takeover offer for rival Virgin Money.

The all-share “preliminary approach”, which values Virgin at about £1.6bn, would create a company with six million personal and business customers and create a leading challenger to Britain’s biggest lenders, CYBG said.

It will add to pressure on competitor TSB – which has five million customers – after it was hit by a botched IT upgrade that left many without online banking.
Shares in Virgin Money climbed 8% in early trading, while CYBG was up 1%.
CYBG said in a statement confirming its offer: “CYBG believes the combination would create the UK’s leading challenger bank offering both personal and SME customers a genuine alternative to the large incumbent banks.
“The combination would provide a powerful full-service banking offer, including leading digital and mobile banking services.”

The group said it represented an “attractive up-front premium” for Virgin Money shareholders, who would own 36.5% of the enlarged lender.
It added that it recognised the “strength and appeal” of the Virgin Money brand and that this would play a “significant role” in the combined business subject to the agreement of Richard Branson’s Virgin Group, currently a major shareholder.
CYBG, which made its stock market debut in 2016 after being spun off by National Australia Bank, said there was no certainty that a formal offer would be made.

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Virgin Money, which launched in 1995, expanded with the takeover of Northern Rock in 2011.
It said it was “in the process of reviewing” the proposal from CYBG.

Source: Sky

About Business Ideas UK

My name is Joel Bissitt. I have been an entrepreneur for 24 years and have run many small businesses across various sectors. For the last 10 years I have worked mainly within online media, franchising and small business start-ups.

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