Nationwide to acquire Virgin Money, creating the second-largest provider of mortgages and savings in UK.

From Morningstar:

Nationwide Building Society has preliminarily agreed to buy Virgin Money UK for £2.9 billion in a deal that would create the second-largest provider of mortgages and savings in the UK. The offer is worth 220p per share, representing a 38% premium to Virgin Money’s closing price. Virgin Money would recommend the offer to shareholders if finalized.

The potential deal with Nationwide would allow Virgin Money to expand its customer offerings and strengthen its position as a national competitor in the banking sector. While some feel the offer undervalues the group, the likelihood of a counteroffer is seen as very low. Virgin Money’s licensing agreement with Virgin Enterprises would be terminated upon completion of the acquisition.

The merger between Nationwide and Virgin Money would create total assets of around £366.3 billion and total lending of £283.5 billion. Nationwide remains committed to being a building society and a modern mutual, and the deal would enable them to broaden and deepen their products and services faster than through organic growth. Nationwide also plans to retain all branches until at least 2026.

In the UK market, the FTSE 100 opened down 0.3% while the FTSE 250 was up 0.2% after the Chancellor’s Budget and ahead of an interest rate decision by the European Central Bank. Multiple companies reported earnings, with Rentokil up almost 13%, Spirax-Sarco Engineering up 7%, and Aviva up 4%. On the other hand, Entain is down almost 6% and Melrose Industries down 4%.



Read more at Morningstar: Nationwide to Buy Virgin Money for £2.9 Billion