Virgin Money and CYBG deal given the green light by regulators paving the way for 6million customers to be brought under one brand
- Share price of both CYBG and Virgin Money increased following announcement
- Deal set to be completed later this month on 15 October
Shares in Virgin Money are up 2.51 per cent or 9.25p to 378.35p, while CYBG shares are up 1.20 per cent or 3.7p to 313.3p.
The combined group will be branded as Virgin Money and have around six million customers.
Step forward: Regulators have given Clydesdale and Yorkshire Banking Group the green light to plough ahead with its takeover of Virgin Money
Virgin Money shareholders will receive 1.2125 new CYBG shares for every Virgin Money share held, and will own about 38 per cent of the merged business.
Shares to Virgin Money will be issued by 15 October when they begin trading on the London Stock Exchange.
Investors in both firms voted overwhelmingly in favour of the deal last month.
The boards of both CYBG and Virgin Money believe the deal will create Britain’s ‘first true national banking competitor’.
In a statement, the companies said: ‘The offer was made subject to the… receipt of the relevant approvals from the Financial Conduct Authority and the Prudential Regulation Authority.
‘Virgin Money and CYBG are pleased to confirm that, on 3 October 2018, the FCA and the PRA gave written notice to CYBG, Virgin… of their approval of the acquisition.’
CYBG’s David Duffy will stay on as chief executive, leaving Virgin Money boss Jayne-Anne Gadhia to serve in a consultancy role as his senior adviser.
While Virgin Money’s investors approved the tie-up, they baulked at an amendment to the company’s pay policy which will allow Gadhia, 56, to take home £1.8million in cash as a redundancy package. That is on top of her £1million cash-and-share bonus for 2018 and other share rewards worth around £5million at current market prices.
Though 13.1 per cent of investors voted against the change, the rebellion was well short of the 50.1 per cent required to rule it out.