- Nationwide faces petition as Virgin Money acquisition progresses
- Members demand input; Nationwide emphasizes need for speed
- Debate ensues over benefits and risks of Virgin acquisition
A special meeting is imminent as a petition urging Nationwide to grant members a voice in its acquisition of Virgin Money approaches the required number of signatures.
Debbie Crosbie led the building society, which maintains that consulting its 16 million members who own the mutual on its proposal for the High Street lender is unnecessary.
Nationwide contends that any consultation could cause the £2.9 billion transaction to be delayed.
However, some members argue that acquiring Virgin Money, which will result in a one-third expansion of Nationwide, is a risky move and demand that the building society explain to consumers the benefits.
Mikael Armstrong, one of them, describes the company’s refusal to consult its owners regarding the Virgin transaction as “an outrageous display of arrogance.” He further states that there is “completely no assurance” that purchasing Virgin would “benefit members in any way.”
Armstrong established a change.org petition that collected more than 400 of the necessary 500 signatures to convene a special meeting of the society’s members.
He promises to “organise the paperwork” and deliver the petition to Nationwide’s headquarters once the goal has been met.
Additionally, each member who signs is required to make a retainer of £50.
The 500 signature rule, which was established well before social media, is considered a low threshold, according to experts. Forced to conduct a one-time meeting would be detrimental to Nationwide, as it could potentially jeopardise the Virgin deal.
A court hearing to approve the Virgin has been scheduled for April 18. Offer documents, which do possess voting rights, will be dispatched to Virgin Money shareholders by the conclusion of this month, pending approval.
Virgin Group, the largest shareholder of the bank and led by Sir Richard Branson, stands to gain £400 million for its 14 per cent stake, in addition to £300 million in add-ons. Kevin Parry, chairman of Nationwide, has already communicated with sixteen million members to inform them of the parameters of the historic transaction that introduces the building society to business banking.
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Even if a special members’ meeting were to be convened, the Nationwide board would reportedly oppose a vote on the Virgin transaction, according to experts. Last week, a setback for Crosbie occurred when an advertisement featuring The Crown actor Dominic West was prohibited for deceiving consumers into believing that no branches of the building society were closing.
One of the 281 complaints lodged with the Advertising Standards Authority regarding the advertisement was from Nationwide’s competitor, Santander, which claimed that a number of its locations had recently closed or had their hours reduced.
Nationwide failed to adequately communicate that a commitment not to close any additional branches would expire in 2026, according to the watchdog. Since then, this pledge has been renewed through 2028.
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