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Virgin Money mulls takeover advances from owner of Clydesdale and Yorkshire Bank

Virgin Money is mulling a proposed takeover bid from the owner of Clydesdale Bank and Yorkshire Bank which would value the challenger bank at ?1.6bn.
The Newcastle upon Tyne-based lender, backed by billionaire Richard Branson, said CYBG had suggested handing investors 1.13 of its shares for each Virgin Money share they own to give them a 36.5pc of the combined group.
Shares in Virgin Money jumped 8pc to 339p on Tuesday morning after it confirmed late on Monday night that CYBG may make an approach. 
CYBG’s preliminary approach offers Virgin Money shareholders a 15pc premium compared to its close on Friday, and a stake in the creation of “the UK’s leading challenger bank”.
CYBG said it believed that the combined group could offer 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 for six million personal and business customers, bringing together the complementary strengths of CYBG and Virgin Money,” it said.
Virgin Money mulls takeover advances from owner of Clydesdale and Yorkshire Bank

The Richard Branson backed challenger defied doubters in its latest financial results

Credit:
James D. Morgan / Rex Features
Virgin Money urged shareholders to take no action in the wake of CYBG's move, noting that a formal offer might not emerge.
The bank added that its board was in the process of reviewing the proposal. A further announcement would be made in due course, it said.
The potential takeover emerged after Virgin Money defied its doubters who feared the challenger bank's margins would come under pressure due to cut-throat competition in the mortgage market.
Instead the bank's share price bounded over 6pc higher last week after it revealed resilient margins and better than expected growth in deposits of 7.4pc to ?31.1bn.
Mr Branson owns around 35pc of Virgin Money, putting him in line for a ?500m windfall.
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