- Nationwide to award members at least £350 million loyalty incentive
- Controversy surrounds Nationwide’s £2.9 billion Virgin Money takeover
- Virgin Money’s Australian investors hold key vote for approval
Nationwide is prepared to award millions of members a loyalty incentive totaling at least £350 million.
The building society gave £100 to approximately 3.3 million consumers the previous year. However, the recent payout could have been even greater because higher interest rates have bolstered the mutual fund’s profits.
Nationwide has expressed its intention to leverage this situation to maintain the provision of ‘Fairer Share’ compensation to qualified members.
The information, which will be disclosed on Thursday, will be made public one day after Virgin Money shareholders vote on whether or not to accept Nationwide’s controversial £2.9 billion takeover offer.
The mutual, which is owned by its sixteen million customers, has been criticized for failing to give them a vote on the deal and for failing to outline the takeover’s benefits. The transaction is the biggest in UK banking since the 2008 financial crisis.
It argues that the combined entity will have “enhanced financial strength” after the acquisition of Virgin Money, ranking second only to Lloyds Banking Group in terms of loans and savings.
Growing opposition has been expressed to the 220p per share deal, not just among Nationwide members who assert that their right to vote was violated on a “technicality.”
The largest independent investor in Virgin Money criticized the board for endorsing Nationwide’s offer, stating that it was “likely to shortchange shareholders.”
“Unlock your financial potential with free Webull shares in the UK.”
The Australian fund management firm Allan Gray, which owns 10% of Virgin Money, expressed “disappointment” with the offer but did not specify its stance.
The outcome is in the hands of Australian investors, who own slightly less than half of the bank’s shares.
This is a relic of when National Australia Bank possessed the former Clydesdale and Yorkshire Bank Group.
Sir Richard Branson’s Virgin Group has already pledged a 15% stake in support of the transaction.
More than £600 million is potentially available to the entrepreneur in exchange for his shares and licensing add-ons.
The deal must be approved by three-quarters of voting shareholders of Virgin Money, which experts say is an extremely high threshold.
