Clydesdale
Marketing No Comments

Shareholders have backed Clydesdale bank’s £1.7bn all-share takeover of Virgin Money, and top investors believe it could start a buying spree.

The combination of the two FTSE 250 lenders will create a bank with six million customers and £83bn worth of assets. The deal is expected to close by the end of the year.

A top 10 investor in Virgin Money told The Telegraph he expected the tie-up to be the first of many.

“The combined group will have quite a lot of surplus capital,” he said. “CYBG has a chance to create a challenger bank that actually has some heft and can compete effectively against the big banks.

“Another takeover is unlikely in the next few months, but early to mid next year they could be in a position to do another deal.”

Investors in both firms voted in favour of the deal today, with more than 99pc supporting it. However, some Virgin Money shareholders rebelled against a resolution giving the bank’s chief executive, Jayne-Anne Gadhia, a £619,000 redundancy payout, on top of a termination payment of £1.1m.

She will also receive a bonus owed to her of £1m, taking her golden goodbye to more than £2.6m. The vote passed, but with 13pc voting against.

Ms Gadhia will not join the board of the combined bank, but will work with it as a consultant for up to 18 months. Clydesdale chief executive David Duffy will lead the enlarged firm.

City sources said TSB could be a tempting next target for Clydesdale and Yorkshire Banking Group (CYBG) – despite its high profile IT woes – as well as the smaller lender OneSavings Bank.

City analysts have previously told The Telegraph TSB’s IT meltdown made it more likely Spanish parent Sabadell would sell the UK bank.

“If a third party came along and looked at the business there’s a much higher probability that they would sell now,” John Cronin at Goodbody said.

The top 10 investor, speaking ahead of today’s vote, said the integration of Virgin Money should be “relatively straightforward” as it has few current account customers to transfer, potentially paving the way for a buying spree.

Source: Telegraph

Did you enjoy this article? Please rate this article

Average rating (4.3/5) based on 33 vote(s)

Leave a Reply