Duffy hopes to talk Virgin into clinch
Former AIB chief executive David Duffy's CYBG, a stockmarket listed UK consumer and business lender, has sweetened its £1.6bn (€1.8bn) bid for Virgin Money by offering its target shareholders, including Richard Branson, a larger share of a combined company.
Virgin Money shareholders would own about 38pc of the merged company compared with 36.5pc in CYBG's previous approach and would retain dividends through the end of June, according to a statement.
CYBG, formerly the British division of National Australia Bank, is proposing an all-stock transaction and is seeking greater scale and cost savings by acquiring Virgin Money's mortgage assets, branches, credit cards and savings accounts.
It hopes to build scale to take on Britain's big high-street lenders. The "proposed combination would create the UK's first true national banking competitor," CYBG said. "Discussions are ongoing regarding other terms and conditions of the proposed combination and reciprocal due diligence is being conducted."
CYBG increased its offer by 7pc for each Virgin Money share, the company said. The bank, which initially made an offer in May, now plans to pay 1.2125 shares for each Virgin Money share.
"Even on revised terms we continue to view the offer as being somewhat lightweight, providing little in the way of a takeover premium to our standalone fair value for Virgin Money of 350 pence a share," wrote Gary Greenwood, an analyst at Shore Capital, in a note to investors. (Reuters)