Regulatory approval secured for CYBG’s £1.7bn takeover of Virgin Money
Two regulatory bodies have given their approval for CYBG – the owner of Leeds-headquartered Yorkshire Bank – to acquire Virgin Money.
Updating the market this morning, CYBG said it had receipt of the relevant approvals from the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) for the deal, which is worth £1.7bn.
It is the latest step in the merger, which, once complete, will also be double the size of the nearest challenger bank and the sixth largest bank in the country.
On 18 June, the boards of Virgin Money and CYBG announced that they had reached agreement on the terms of a recommended all-share offer by CYBG for the entire issued and to be issued share capital of Virgin Money.
The offer is being implemented by means of a scheme of arrangement. On 10 September, the scheme was approved by was approved by the CYBG Shareholders at the CYBG General Meeting, and Virgin Money shareholders also overwhelmingly supported the takeover.
The scheme remains subject to certain conditions, including sanction by the Court at the Court Hearing, which is expected to take place on 12 October.
Subject to the scheme receiving the sanction of the court, the merger is expected to become effective on 15 October.
By 8am this date, new CYBG shares will be issued to Virgin Money shareholders, new shares will be admitted to the stock exchange and Virgin Money shares will be cancelled.
The takeover will see CYBG shareholders own 62% of the enlarged group, with Virgin Money shareholders owning 38%.
The group will double in size, serving six million customers with total lending of £70bn. It will employ 9,500 people and have 250 branches nationwide.
Under the terms of the deal, Virgin Money shareholders will get 1.2125 new CYBG shares for every Virgin Money share they hold.