Nationwide B.S. Virgin Money UK PLC Clydesdale Bank PLC Nationwide BS- 34VG - Recommended cash offer for Virgin Money UK PLC
21/03/2024 07:00
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RNS Number : 7577H Nationwide Building Society 21 March 2024
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
FOR IMMEDIATE RELEASE
21 March 2024
RECOMMENDED CASH ACQUISITION
OF
VIRGIN MONEY UK PLC
BY
NATIONWIDE BUILDING SOCIETY
Summary and highlights
· The boards of directors of Nationwide Building Society ("Nationwide")
and Virgin Money UK PLC ("Virgin Money") are pleased to announce that they
have agreed the terms of a recommended cash acquisition of the entire issued
and to be issued share capital of Virgin Money by Nationwide (the
"Acquisition").
· Under the terms of the Acquisition, each Virgin Money Shareholder
will be entitled to receive:
for each Virgin Money Share: 220 pence in cash
comprising:
o 218 pence per Virgin Money Share in cash consideration (the
"Consideration"); and
o a proposed dividend of 2 pence per Virgin Money Share (the "FY2024
Dividend"), to be paid (subject to the approval of the Virgin Money Board) as
part of Virgin Money's ordinary course FY2024 dividend calendar or, if
earlier, shortly prior to Completion.
· The total value of 220 pence per Virgin Money Share values the
entire issued and to be issued share capital of Virgin Money at approximately
£2.9 billion on a fully diluted basis and represents a premium of
approximately:
o 38 per cent. to the Closing Price of 159.1 pence per Virgin Money Share on
6 March 2024 (being the last Business Day before the commencement of the Offer
Period); and
o 40 per cent. to the volume-weighted average Closing Price of 157.5 pence
per Virgin Money Share for the three-month period ended 6 March 2024.
Acquisition Overview
· The Boards of Nationwide and Virgin Money believe that the
Acquisition will combine two complementary businesses, creating the second
largest provider of mortgages and savings in the UK.
· Nationwide has grown over time through a series of historical
acquisitions to become the UK's largest building society. Nationwide remains
wholly committed to being a building society and a modern mutual that meets
its customers' and members' banking needs to a high standard.
· The Nationwide Board believes that the Acquisition will enable
Nationwide to accelerate its strategy and broaden and deepen its products and
services faster than could be achieved organically, whilst providing a return
that will further support Nationwide's financial strength and deliver greater
value to its customers and members.
· The Nationwide Board believes that the Acquisition will create a
combined group with enhanced financial strength, including through access to
greater diversity of funding, notably from business deposits, and the
opportunity to generate improved returns. Nationwide expects to be able to
capitalise on this financial strength to support the continued provision of
its 'Fairer Share Payment' to eligible Nationwide members and member financial
benefits via mortgage and savings rates that are, on average, better than the
market average, along with other incentives.
Arrangements with Virgin Enterprises and Virgin Red
· Virgin Money licenses certain rights to use the "Virgin Money" brand
from Virgin Enterprises pursuant to a brand licence agreement (the "TMLA").
Nationwide recognises the significant role that the "Virgin Money" brand has
played in the development of Virgin Money over time. However, as part of its
longer-term integration strategy, Nationwide intends for the Virgin Money
business to re-brand over time.
· Accordingly, prior to the date of this announcement, Nationwide
and Virgin Enterprises entered into the TMLA Amendment Agreement pursuant to
which they agreed that, amongst other things, the TMLA would be terminated
automatically on the fourth anniversary of Completion, following which the
Virgin Money business will have a two-year period to re-brand.
· In addition, Nationwide has entered into the Virgin Red Exclusivity
Agreement with Virgin Red pursuant to which the parties have agreed to engage
in discussions for a six-month period following Completion with respect to a
potential partnership relating to the expansion of the "Virgin Red" loyalty
programme to customers of the Combined Group. However, there can be no
certainty at this stage that any definitive agreement relating to such a
partnership will be entered into following Completion nor as to the terms of
any such agreement. Certain exclusivity commitments from each party would
apply from the date of the Virgin Red Exclusivity Agreement until the end of
the discussion period noted above.
· Further details regarding the TMLA (as it will be amended pursuant
to the TMLA Amendment Agreement) and the Virgin Red Exclusivity Agreement are
set out in paragraph 4 of this announcement.
· The amendment of the TMLA pursuant to the TMLA Amendment Agreement
and the Virgin Red Exclusivity Agreement must be approved by an ordinary
resolution of the Independent Virgin Money Shareholders (which requires more
than 50 per cent. of the votes cast by Independent Virgin Money Shareholders
on a poll to be cast in favour) for the purposes of Note 2 on Rule 16.1 of the
Takeover Code (the "Virgin Resolution"). Virgin Group and Vieco Investments
(an entity controlled by Sir Richard Branson), both of which hold Virgin Money
Shares, will not be able to vote on the Virgin Resolution.
Recommendation
· The Virgin Money Directors, who have been so advised by Goldman
Sachs International and J.P. Morgan Cazenove as to the financial terms of the
Acquisition, consider the terms of the Acquisition to be fair and reasonable.
In providing their advice to the Virgin Money Directors, Goldman Sachs
International and J.P. Morgan Cazenove have taken into account the commercial
assessments of the Virgin Money Directors. Accordingly, the Virgin Money
Directors intend to recommend unanimously that Virgin Money Shareholders vote
in favour of the Scheme and the Acquisition Resolution(s) as the Virgin Money
Directors who are interested in Virgin Money Shares have irrevocably
undertaken to do in respect of their entire beneficial holdings of 1,945,304
Virgin Money Shares representing, in aggregate, approximately 0.2 per cent. of
Virgin Money's total issued share capital.
· The Independent Virgin Money Directors also intend to recommend
unanimously that the Independent Virgin Money Shareholders vote in favour of
the Virgin Resolution as the Independent Virgin Money Directors who are
interested in Virgin Money Shares have irrevocably undertaken to do in respect
of their entire beneficial holdings of 1,920,304 Virgin Money Shares
representing, in aggregate, approximately 0.1 per cent. of Virgin Money's
total issued share capital. The terms of the TMLA Amendment Agreement and the
Virgin Red Exclusivity Agreement are considered by Goldman Sachs International
and J.P. Morgan Cazenove to be fair and reasonable. In forming this view,
Goldman Sachs International and J.P. Morgan Cazenove have taken into account
the commercial assessments of the Independent Virgin Money Directors.
· Sara Weller, the Virgin Money Director who is appointed to the
Virgin Money Board as a representative of Virgin Enterprises, has not been
involved in Virgin Money Board discussions relating to aspects of the
Acquisition specifically concerning the TMLA, the "Virgin Money" brand, the
Virgin Red Exclusivity Agreement or the Independent Virgin Money Directors'
recommendation in respect of the Virgin Resolution. The passing of the Virgin
Resolution is a non-waivable condition to the Acquisition and, if not passed,
the Acquisition will lapse and will not proceed to Completion.
Irrevocable undertakings
· Nationwide has received from Virgin Group and Vieco Investments
irrevocable undertakings to vote in favour of the Scheme and the Acquisition
Resolution(s) in respect of 188,852,373 Virgin Money Shares in aggregate,
representing approximately 14.6 per cent. of Virgin Money's total issued share
capital.
· Accordingly, taking together the irrevocable undertakings received
from the Virgin Money Directors, Virgin Group and Vieco Investments,
Nationwide has received irrevocable undertakings to vote in favour of the
Scheme and the Acquisition Resolution(s) in respect of a total of 190,797,677
Virgin Money Shares, representing, in aggregate, approximately 14.7 per cent.
of the total issued share capital of Virgin Money.
· Under the terms of all the irrevocable undertakings received by
Nationwide, if the Acquisition is implemented by way of a Takeover Offer, the
relevant shareholders have also committed to accept the Takeover Offer.
Further details of these irrevocable undertakings are set out in Appendix 3 to
this announcement.
General
· It is intended that the Acquisition will be implemented by way of
a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act
(although Nationwide reserves the right to effect the Acquisition by way of a
Takeover Offer, subject to the consent of the Panel and the terms of the
Co-operation Agreement).
· The Acquisition will be subject to the Conditions and terms set out in
Appendix 1 to this announcement, including, amongst other things, approvals by
the requisite majorities of Virgin Money Shareholders of the Scheme and the
Resolutions at the Court Meeting and General Meeting respectively, the receipt
of regulatory approvals from the PRA, the FCA and the CMA, and to the full
terms and conditions of the Acquisition which will be set out in the Scheme
Document. The Acquisition will not be subject to any condition relating to the
passing of a resolution by Nationwide's members.
· In this announcement, unless the context requires otherwise,
references to Virgin Money Shares include Virgin Money CDIs, references to
Virgin Money Shareholders include Virgin Money CDI Holders and references to
Virgin Money Shareholders voting in respect of the Scheme or the Resolutions
or accepting a Takeover Offer shall include Virgin Money CDI Holders procuring
the same.
· Virgin Money Shareholders will be able to elect to receive their
Consideration in Australian dollars or New Zealand dollars instead of pound
sterling (based on the prevailing exchange rates at a date to be determined),
further details regarding which will be set out in the Scheme Document.
· The Scheme Document containing further information about the
Acquisition, an expected timetable of principal events, steps to be taken by
Virgin Money Ordinary Shareholders and Virgin Money CDI Holders, and the
notices of the Meetings, together with the accompanying Forms of Proxy (for
Virgin Money Ordinary Shareholders) and CDI Voting Instruction Forms (for
Virgin Money CDI Holders) will be published in due course. A short extension
to the customary 28-day period for publication of the Scheme Document has been
requested of, and consented to by, the Panel having regard to, amongst other
things, the availability of appropriate Court dates given the impact of the
Court's Easter vacation. Accordingly, it is expected that the Scheme Document
will be published no later than 30 April 2024.
· Prior to the publication of the Scheme Document, Virgin Money will
seek the necessary permission from the Court to convene the Court Meeting. A
hearing of the Court before a High Court judge (the "Scheme Convening
Hearing") has been scheduled for 19 April 2024 for this purpose. At the Scheme
Convening Hearing, amongst other things, Virgin Money will determine with the
Court whether, for the purposes of voting at the Court Meeting, all Virgin
Money Shareholders, including Virgin Group and Vieco Investments, can vote
together as one class. The Court will consider whether the legal rights of
Virgin Group and Vieco Investments, in the light of the arrangements with
Virgin Enterprises and Virgin Red described above (and as further set out in
paragraph 4 below) are sufficiently similar to the legal rights of the other
Virgin Money Shareholders, or whether a difference in legal rights makes it
more appropriate for Virgin Group and Vieco Investments to be distinguished as
a separate class of shareholders. Virgin Money and Nationwide consider that
all Virgin Money Shareholders should vote in a single class of shareholders.
The Scheme Convening Hearing is expected to take place at the Companies Court,
The Rolls Building, 7 Rolls Buildings, Fetter Lane, London EC4A 1NL, United
Kingdom, and the time of the hearing will be set out on HM Courts &
Tribunals Service's website at www.justice.gov.uk/courts/court-lists. Virgin
Money Shareholders have the right to attend in person or through counsel and
make representations at the Scheme Convening Hearing.
· The Acquisition is expected to become Effective during Q4 2024,
subject to the satisfaction (or, where applicable, waiver) of the Conditions
and further terms set out in Appendix 1.
Chairman of Nationwide Building Society, Kevin Parry commented:
"Following full consideration and the appropriate due diligence, and after
taking comments from members into account, the Board of Nationwide's
assessment is that the binding offer to acquire Virgin Money is in the best
interests of the Society and its present and future members."
Chief Executive Officer of Nationwide Building Society, Debbie Crosbie
commented:
"This acquisition strengthens Nationwide and means we can offer more value and
broader services for our current and future members. More people will
experience the benefits of mutual ownership and the customer-focused approach
of a building society. This includes Nationwide's unique Branch Promise, which
we are extending until at least the start of 2028. The Promise will also apply
to Virgin Money branches."
Chairman of Virgin Money UK PLC, David Bennett commented:
"The Board of Virgin Money believes that this strategic transaction recognises
the strengths and opportunities in our business. We're pleased to recommend
the terms agreed with Nationwide, which deliver an attractive premium for
our shareholders in cash and reflect the Group's strong future prospects,
combining two complementary businesses."
Chief Executive Officer of Virgin Money UK PLC, David Duffy commented:
"The proposed combination with Nationwide presents an exciting opportunity to
build on Virgin Money's significant strategic and operational progress,
including the consistent growth in our retail and business customers, deposits
and target lending. Together the combined group can offer more great products
and services to a larger customer base."
This summary should be read in conjunction with, and is subject to, the full
text of this announcement and the Appendices. The Acquisition will be subject
to the Conditions and other terms set out in Appendix 1 and to the full terms
and conditions which will be set out in the Scheme Document. Appendix 2
contains the bases of calculation and sources of certain information contained
in this announcement. Details of the irrevocable undertakings received by
Nationwide in connection with the Acquisition are set out in Appendix 3.
Certain terms used in this announcement are defined in Appendix 4.
Enquiries:
Nationwide Building Society
Muir Mathieson, Deputy CFO and Treasurer
Sarah Abercrombie, Head of Investor Relations, Credit Ratings and Treasury
Sustainability
Media enquiries: Nationwide-UK@fgsglobal.com
Investor enquiries: Nationwide.treasury@Nationwide.co.uk
UBS (financial adviser to Nationwide) +44 (0)20 7567 8000
Sam Small
Ben Crystal
David Sissons
FGS Global (public relations adviser to Nationwide) +44 (0)20 7251 3801
James Murgatroyd
Charlie Chichester
Richard Webster-Smith
Sophia Johnston
Virgin Money UK PLC
Investors and Analysts
Richard Smith
+44 (0)7483 399303
Head of Investor Relations & Sustainability
richard.smith@virginmoney.com
Company Secretary
Lorna McMillan
+44 (0)7834 585436
Group Company Secretary
lorna.mcmillan@virginmoney.com
Media Relations
+44 (0)800 066 5998
Press Office
press.office@virginmoney.com
Goldman Sachs International (joint Rule 3 independent financial adviser and
joint corporate broker to Virgin Money) +44 (0)20 7774 1000
Anthony Gutman
Nimesh Khiroya
Ronan Breen
Bertie Whitehead
Pernille Thuesen
J.P. Morgan Cazenove (joint Rule 3 independent financial adviser and joint +44 (0)20 3493 8000
corporate broker to Virgin Money)
Conor Hillery
Dwayne Lysaght
Claire Brooksby
Ravin Mehta
Teneo (public relations adviser to Virgin Money)
Douglas Campbell (UK)
+44 (0)7753 136628
Julia Henkel (Australia)
+61 406 918080
Slaughter and May is acting as legal adviser to Nationwide in connection with
the Acquisition.
Clifford Chance LLP is acting as legal adviser to Virgin Money in connection
with the Acquisition.
Inside Information
This announcement contains inside information as stipulated under the Market
Abuse Regulation no 596/2014 (incorporated into UK law by virtue of the
European Union (Withdrawal) Act 2018 as amended by virtue of the Market Abuse
(Amendment) (EU Exit) Regulations 2019). Upon the publication of this
announcement via a regulatory information service, this inside information is
now considered to be in the public domain.
Further information
This announcement is for information purposes only and is not intended to and
does not constitute, or form any part of any offer, invitation or the
solicitation of an offer to purchase, otherwise acquire, subscribe for, sell
or otherwise dispose of any securities, or the solicitation of any vote or
approval in any jurisdiction, pursuant to the Acquisition or otherwise, nor
shall there be any sale, issuance or transfer of securities of Virgin Money in
any jurisdiction in contravention of applicable law. The Acquisition will be
made and implemented solely pursuant to the terms of the Scheme Document (or
if the Acquisition is implemented by way of a Takeover Offer, the Offer
Document), which will contain the full terms and conditions of the
Acquisition, including details of how to vote in respect of the Acquisition.
Any vote in respect of, or other response to, the Acquisition should be made
only on the basis of the information contained in the Scheme Document (or if
the Acquisition is implemented by way of a Takeover Offer, the Offer
Document).
Virgin Money and Nationwide will prepare the Scheme Document (or if the
Acquisition is implemented by way of a Takeover Offer, the Offer Document) to
be distributed to Virgin Money Shareholders. Virgin Money and Nationwide urge
Virgin Money Shareholders to read the Scheme Document (or if the Acquisition
is implemented by way of a Takeover Offer, the Offer Document) when it becomes
available because it will contain important information relating to the
Acquisition.
This announcement does not constitute a prospectus, prospectus equivalent
document or an exempted document.
The statements contained in this announcement are made as at the date of this
announcement, unless some other times is specified in relation to them, and
publication of this announcement shall not give rise to any implication that
there has been no change in the facts set forth in this announcement since
such date.
Disclaimers
This announcement does not constitute or form part of, and should not be
construed as, any public offer under any applicable legislation or an offer to
sell or solicitation of any offer to buy any securities or financial
instruments or any advice or recommendation with respect to such securities or
other financial instruments.
UBS AG London Branch ("UBS") is authorised and regulated by the Financial
Market Supervisory Authority in Switzerland. It is authorised by the PRA and
subject to regulation by the FCA and limited regulation by the PRA in the
United Kingdom. UBS is acting exclusively for Nationwide and no one else in
connection with the Acquisition. In connection with such matters, UBS will not
regard any other person as its client, nor will it be responsible to any other
person for providing the protections afforded to its clients or for providing
advice in relation to the Acquisition, the contents of this announcement or
any other matter referred to herein.
Goldman Sachs International ("GSI"), which is authorised by the PRA and
regulated by the FCA and the PRA in the United Kingdom, is acting for Virgin
Money and no one else in connection with the distribution of this document and
will not be responsible to anyone other than Virgin Money for providing the
protections afforded to clients of GSI, or for giving advice in connection
with the Acquisition or any matter referred to herein.
J.P. Morgan Securities plc, which conducts its UK investment banking business
as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised in the United
Kingdom by the PRA and regulated in the United Kingdom by the PRA and the FCA.
J.P. Morgan Cazenove is acting as joint financial adviser exclusively for
Virgin Money and no one else in connection with the matters set out in this
announcement and will not regard any other person as its client in relation to
the matters in this announcement and will not be responsible to anyone other
than Virgin Money for providing the protections afforded to clients of J.P.
Morgan Cazenove or its affiliates, nor for providing advice in relation to any
matter referred to herein.
Overseas jurisdictions
This announcement has been prepared in accordance with, and for the purposes
of complying with, English law, the Takeover Code, the Market Abuse Regulation
and the Listing Rules, and information disclosed may not be the same as that
which would have been disclosed if this announcement had been prepared in
accordance with the laws of jurisdictions outside of England.
The release, publication or distribution of this announcement in, into or from
jurisdictions other than the United Kingdom or Australia may be restricted by
law and therefore any persons who are subject to the laws of any jurisdiction
other than the United Kingdom or Australia should inform themselves about, and
observe any applicable requirements.
The availability of the Acquisition to Virgin Money Shareholders who are not
resident in and citizens of the United Kingdom or resident in Australia may be
affected by the laws of the relevant jurisdictions in which they are located
or of which they are citizen. Persons who are not resident in the United
Kingdom or Australia should inform themselves of, and observe any applicable
legal or regulatory requirements of their jurisdictions. In particular, the
ability of persons who are not resident in the United Kingdom or Australia to
vote their Virgin Money Shares or to execute and deliver CDI Voting
Instruction Forms in respect of Virgin Money CDIs (as applicable) with respect
to the Scheme at the Meetings, or to execute and deliver Forms of Proxy (or
other proxy instructions) appointing another to vote at the Meetings on their
behalf or CDI Voting Instruction Forms (or other voting instructions) issuing
voting instructions in relation to the Meetings, may be affected by the laws
of the relevant jurisdictions in which they are located. Any failure to comply
with the applicable restrictions may constitute a violation of the securities
laws of any such jurisdiction. To the fullest extent permitted by applicable
law, the companies and persons involved in the Acquisition disclaim any
responsibility or liability for the violation of such restrictions by any
person. Further details in relation to Overseas Shareholders will be contained
in the Scheme Document.
Unless otherwise determined by Nationwide or required by the Takeover Code,
and permitted by applicable law and regulation, the Acquisition will not be
made available, in whole or in part, directly or indirectly, in, into or from
a Restricted Jurisdiction where to do so would constitute a violation of the
relevant laws or regulations of such jurisdiction and no person may vote in
favour of the Acquisition by any such use, means, instrumentality or from
within a Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction. Copies of this
announcement and any formal documentation relating to the Acquisition are not
being, and must not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in or into or from any Restricted Jurisdiction and persons
receiving such documents (including custodians, nominees and trustees) must
not mail or otherwise forward, distribute or send it in or into or from any
Restricted Jurisdiction. Doing so may render invalid any related purported
vote in respect of the Acquisition. If the Acquisition is implemented by way
of a Takeover Offer (unless otherwise permitted by applicable law and
regulation), the Takeover Offer may not be made directly or indirectly, in or
into, or by the use of mails or any means or instrumentality (including, but
not limited to, facsimile, e-mail or other electronic transmission, telex or
telephone) of interstate or foreign commerce of, or of any facility of a
national, state or other securities exchange of any Restricted Jurisdiction
and the Takeover Offer may not be capable of acceptance by any such use,
means, instrumentality or facilities.
The Acquisition will be subject to English law and the jurisdiction of the
Court, and the applicable requirements of the Takeover Code, the Panel, the
FCA, the London Stock Exchange (including pursuant to the Listing Rules) and
the Registrar of Companies.
Notice to US investors in Virgin Money
The Acquisition relates to the shares of an English company and is being made
by means of a scheme of arrangement provided for under English company law. A
transaction effected by means of a scheme of arrangement is not subject to the
tender offer rules or the proxy solicitation rules under the US Exchange Act
of 1934. Accordingly, the Acquisition is subject to the disclosure
requirements and practices applicable in the United Kingdom to schemes of
arrangement which differ from the disclosure requirements of United States
tender offer and proxy solicitation rules. Neither the United States
Securities and Exchange Commission, nor any securities commission of any state
of the United States, has approved, disapproved or passed judgement on the
fairness or the merits of any offer, or passed comment upon the adequacy or
completeness of any of the information contained in this announcement. Any
representation to the contrary may be a criminal offence in the United States.
If, in the future, Nationwide exercises the right, with the consent of the
Panel (where necessary), to implement the Acquisition by way of a Takeover
Offer and determines to extend the offer into the United States, the
Acquisition will be made in compliance with applicable United States laws and
regulations, including Section 14(e) of the US Securities Exchange Act 1934
and Regulation 14E thereunder. Such a takeover would be made in the United
States by Nationwide and no one else.
Financial information included in this announcement and the Scheme Document
(or, if the Acquisition is implemented by way of a Takeover Offer, the Offer
Document) has been or will have been prepared in accordance with accounting
standards applicable in the United Kingdom that may not be comparable to
financial information of US companies or companies whose financial statements
are prepared in accordance with generally accepted accounting principles in
the United States ("US GAAP"). US GAAP differs in certain significant respects
from accounting standards applicable in the United Kingdom. None of the
financial information in this announcement has been audited in accordance with
auditing standards generally accepted in the United States or the auditing
standards of the Public Company Accounting Oversight Board (United States).
The receipt of cash pursuant to the Acquisition by a Virgin Money Shareholder
in the US as consideration for the transfer of its Scheme Shares (or, in
relation to a Virgin Money CDI Holder, the Scheme Shares underlying its Virgin
Money CDIs) pursuant to the Scheme may be a taxable transaction for US federal
income tax purposes and under applicable US state and local, as well as
foreign and other, tax laws. Each Virgin Money Shareholder is therefore urged
to consult with independent legal, tax and financial advisers in connection
with making a decision regarding the Acquisition.
It may be difficult for Virgin Money Shareholders in the US to enforce their
rights and any claim arising out of the US federal laws in connection with the
Acquisition, since Nationwide and Virgin Money are located in, and organised
under the laws of, a non-US jurisdiction, and some or all of their officers
and directors may be residents of a non-US jurisdiction. Virgin Money
Shareholders in the US may not be able to sue a non-US company or its officers
or directors in a non-US court for violations of the US securities laws.
Further, it may be difficult to compel a non-US company and its affiliates to
subject themselves to a US court's jurisdiction or judgement.
In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US
Securities Exchange Act of 1934, Nationwide, certain affiliated companies and
their nominees or brokers (acting as agents), may from time to time make
certain purchases of, or arrangements to purchase, Virgin Money Shares and/or
Virgin Money CDIs outside of the US, other than pursuant to the Acquisition,
until the date on which the Acquisition and/or Scheme becomes Effective,
lapses or is otherwise withdrawn. Also, in accordance with Rule 14e-5(b) of
the US Securities Exchange Act of 1934, each of UBS, GSI and J.P. Morgan
Cazenove will continue to act as an exempt principal trader in Virgin Money
Shares and Virgin Money CDIs on the London Stock Exchange and the ASX,
respectively. If such purchases or arrangements to purchase were to be made,
they would occur either in the open market at prevailing prices or in private
transactions at negotiated prices and comply with applicable law, including
the US Securities Exchange Act of 1934. Any information about such purchases
will be disclosed as required in the UK, will be reported to the Regulatory
News Service of the London Stock Exchange and will be available on the London
Stock Exchange website at www.londonstockexchange.com.
Cautionary Note Regarding Forward-Looking Statements
This announcement (including information incorporated by reference into this
announcement), statements made regarding the Acquisition, and other
information to be published by Nationwide and/or Virgin Money, contain
statements which are, or may be deemed to be, "forward-looking statements".
Forward-looking statements are prospective in nature and not based on
historical facts, but rather on current expectations and projections of the
management of Nationwide and/or Virgin Money about future events, and are
therefore subject to risks and uncertainties which could cause actual results
to differ materially from the future results expressed or implied by the
forward-looking statements.
The forward-looking statements contained in this announcement include
statements with respect to the financial condition, results of operations and
business of Virgin Money and certain plans and objectives of Nationwide with
respect thereto and other statements other than historical facts. Often, but
not always, forward-looking statements can be identified by the fact that they
do not relate only to historical or current facts and may use words such as
"anticipate", "target", "expect", "estimate", "forecast", "intend", "plan",
"budget", "scheduled" "goal", "believe", "hope", "aims", "continue", "will",
"may", "should", "would", "could", or other words of similar meaning. These
statements are based on assumptions and assessments made by Virgin Money
and/or Nationwide in light of their experience and their perception of
historical trends, current conditions, future developments and other factors
they believe appropriate. By their nature, forward-looking statements involve
known and unknown risk and uncertainty and other factors which may cause
actual results, performance or developments to differ materially from those
expressed in or implied by such, because they relate to events and depend on
circumstances that will occur in the future. Although Nationwide and/or Virgin
Money believe that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such expectations
will prove to have been correct and you are therefore cautioned not to place
undue reliance on these forward-looking statements which speak only as at the
date of this announcement. Neither Nationwide nor Virgin Money assumes any
obligation to update or correct the information contained in this announcement
(whether as a result of new information, future events or otherwise), except
as required by applicable law.
There are a number of factors which could cause actual results and
developments to differ materially from those expressed or implied in
forward-looking statements. Among the factors that could cause actual results
to differ materially from those described in the forward-looking statements
include, but are not limited to: the ability to proceed with or complete the
Acquisition; the ability to obtain requisite regulatory and shareholder
approvals and the satisfaction of other conditions on the proposed terms;
changes in the global, political, economic, business and competitive
environments and in market and regulatory forces; changes in future inflation,
deflation, exchange and interest rates; changes in tax and national insurance
rates; future business combinations, capital expenditures, acquisitions or
dispositions; changes in general and economic business conditions; changes in
the behaviour of other market participants; the anticipated benefits of the
Acquisition not being realised as a result of changes in general economic and
market conditions in the countries in which Nationwide and Virgin Money
operate; weak, volatile or illiquid capital and/or credit markets; changes in
the degree of competition in the geographic and business areas in which
Nationwide and Virgin Money operate; the repercussions of the outbreak of
epidemics (including but not limited to the COVID-19 outbreak); changes to the
Boards of Nationwide and/or Virgin Money and/ or the composition of their
respective workforces; exposures to terrorist activity, IT system failures,
cyber-crime, fraud and pension scheme liabilities; risks relating to
environmental matters such as climate change including Nationwide and/or
Virgin Money's ability along with the government and other stakeholders to
measure, manage and mitigate the impacts of climate change effectively;
changes to law and/or the policies and practices of the Bank of England, the
FCA and/or other regulatory and governmental bodies; changes in the liquidity,
capital, funding and/ or asset position and/or credit ratings of Nationwide
and/or Virgin Money; the repercussions of the UK's exit from the EU (including
any change to the UK's currency and the terms of any trade agreements (or lack
thereof) between the UK and the EU), Eurozone instability, Russia's invasion
of Ukraine, conflicts in the Middle East, any referendum on Scottish
independence, and any UK or global cost of living crisis or recession. Other
unknown or unpredictable factors could cause actual results to differ
materially from those expected, estimated or projected in the forward-looking
statements. If any one or more of these risks or uncertainties materialises or
if any one or more of the assumptions proves incorrect, actual results may
differ materially from those expected, estimated or projected. Such
forward-looking statements should therefore be construed in the light of such
factors.
Neither Nationwide nor Virgin Money, nor any of their respective associates or
directors, officers or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in any
forward-looking statements in their announcement will actually occur. Given
the risks and uncertainties, you are cautioned not to place any reliance on
these forward-looking statements.
Other than in accordance with their legal or regulatory obligations, neither
Nationwide nor Virgin Money is under any obligation, and Nationwide and Virgin
Money expressly disclaim any intention or obligation, to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
Dealing and Opening Position Disclosure Requirements
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the Offer Period and, if later, following the announcement in
which any securities exchange offeror is first identified.
An Opening Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a)
applies must be made by no later than 3.30 pm (London time) on the 10(th)
business day following the commencement of the Offer Period and, if
appropriate, by no later than 3.30 pm (London time) on the 10(th) business day
following the announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of the
offeree company or of a securities exchange offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the offeree
company or of any securities exchange offeror must make a Dealing Disclosure
if the person deals in any relevant securities of the offeree company or of
any securities exchange offeror. A Dealing Disclosure must contain details of
the dealing concerned and of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror, save to the extent
that these details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by no later
than 3.30 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the Offer Period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
Publication on website
In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement
and the documents required to be published under Rule 26 of the Takeover Code,
will be made available free of charge, subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, on Nationwide's
website at www.nationwide.co.uk/virgin-money/ and Virgin Money's website at
www.virginmoneyukplc.com/investor-relations/announcements/ by no later than 12
noon (London time) on the first business day following the date of this
announcement. For the avoidance of doubt, neither the contents of these
websites nor the contents of any websites accessible from any hyperlinks are
incorporated into or forms part of this announcement.
No profit forecasts, profit estimates or quantified benefits statements
No statement in this announcement is intended as a profit forecast, profit
estimate or quantified benefits statement for any period and no statement in
this announcement should be interpreted to mean that earnings or earnings per
share for Virgin Money for the current or future financial years would
necessarily match or exceed the historical published earnings or earnings per
share for Virgin Money.
Requesting hard copy documents
In accordance with Rule 30.3 of the Takeover Code, Virgin Money Shareholders,
persons with information rights and participants in the Virgin Money Share
Plans may request a hard copy of this announcement by contacting Virgin
Money's registrars, Computershare. Virgin Money Ordinary Shareholders can: (i)
submit a request in writing to Computershare Investor Services UK PLC, The
Pavilions, Bridgewater Road, Bristol, BS99 6ZZ, United Kingdom; or (ii) call
+44 (0)370 707 1172. Calls are charged at the standard geographical rate and
will vary by provider. Calls outside the United Kingdom will be charged at the
applicable international rate. Phone lines are open between 8.30 a.m. and 5.30
p.m. (London time), Monday to Friday (excluding public holidays in England and
Wales). Virgin Money CDI Holders can: (i) submit a request in writing to
Computershare Investor Services Pty Limited, Yarra Falls, 452 Johnston Street,
Abbotsford, VIC 3067, Australia; or (ii) call 1800 764 308 (or +61 3 9415 4142
if calling from outside of Australia). Calls are charged at the standard
geographical rate and will vary by provider. Calls outside Australia will be
charged at the applicable international rate. Phone lines are open between
8.30 a.m. and 7.00 p.m. (AEST), Monday to Friday (excluding public holidays in
Australia). Please note that Computershare cannot provide any financial, legal
or tax advice and calls may be recorded and monitored for security and
training purposes.
For persons who receive a copy of this announcement in electronic form or via
a website notification, a hard copy of this announcement will not be sent
unless so requested. Such persons may also request that all future documents,
announcements and information to be sent to them in relation to the
Acquisition should be in hard copy form.
Electronic communications
Please be aware that addresses, electronic addresses and certain other
information provided by Virgin Money Shareholders, persons with information
rights and other relevant persons for the receipt of communications from
Virgin Money may be provided to Nationwide during the Offer Period as required
under Section 4 of Appendix 4 to the Takeover Code.
Rounding
Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of figures that precede them.
General
Nationwide reserves the right to elect, with the consent of the Panel (where
necessary), and subject to the terms and conditions of the Co-operation
Agreement, to implement the Acquisition by way of a Takeover Offer for the
entire issued and to be issued share capital of Virgin Money not already held
by Nationwide as an alternative to the Scheme. In such an event, a Takeover
Offer will be implemented on substantially the same terms, so far as
applicable, as those which would apply to the Scheme.
If the Acquisition is effected by way of Takeover Offer, and such Takeover
Offer becomes or is declared unconditional in all respects and sufficient
acceptances are received, Nationwide intends to exercise its rights to apply
the provisions of Chapter 3 of Part 28 of the Companies Act so as to acquire
compulsorily the remaining Virgin Money Shares in respect of which the
Takeover Offer has not been accepted.
If you are in any doubt about the contents of this announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor or
independent financial adviser duly authorised under FSMA if you are resident
in the United Kingdom or, if not, from another appropriately authorised
independent financial adviser.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
FOR IMMEDIATE RELEASE
21 March 2024
RECOMMENDED CASH ACQUISITION
OF
VIRGIN MONEY UK PLC
BY
NATIONWIDE BUILDING SOCIETY
to be effected by means of a Scheme of Arrangement under Part 26 of the
Companies Act 2006
1. Introduction
The Nationwide Board and Virgin Money Board are pleased to announce that they
have agreed the terms of a recommended cash acquisition of the entire issued
and to be issued share capital of Virgin Money by Nationwide.
2. The Acquisition
It is intended that the Acquisition will be implemented by way of a
Court-sanctioned scheme of arrangement under Part 26 of the Companies Act. The
purpose of the Scheme is to enable Nationwide to acquire the whole of the
issued and to be issued share capital of Virgin Money.
Under the terms of the Acquisition, which will be subject to the Conditions
and other terms set out in Appendix 1 to this announcement and to the full
terms and conditions which will be set out in the Scheme Document, Virgin
Money Shareholders will be entitled to receive:
for each Virgin Money Share: 220 pence in cash
comprising:
· 218 pence per Virgin Money Share in cash consideration (the
"Consideration"); and
· a proposed dividend of 2 pence per Virgin Money Share (the
"FY2024 Dividend"), to be paid (subject to the approval of the Virgin Money
Board) as part of Virgin Money's ordinary course FY2024 dividend calendar or,
if earlier, shortly prior to Completion.
The total value of 220 pence per Virgin Money Share values the entire issued
and to be issued share capital of Virgin Money at approximately £2.9 billion
on a fully diluted basis and represents a premium of approximately:
· 38 per cent. to the Closing Price of 159.1 pence per Virgin Money
Share on 6 March 2024 (being the last Business Day before the commencement of
the Offer Period); and
· 40 per cent. to the volume-weighted average Closing Price of 157.5
pence per Virgin Money Share for the three-month period ended 6 March 2024.
In light of the expected timetable to obtain certain required regulatory
approvals, the Acquisition is currently expected to become Effective during Q4
2024, subject to the satisfaction or (where applicable) waiver of the
Conditions and certain further terms set out in Appendix 1 to this
announcement.
3. Background to and reasons for the Acquisition
The Boards of Nationwide and Virgin Money believe that the Acquisition will
combine two complementary businesses. The Acquisition will create a combined
group with total assets of approximately £366.3 billion and total lending and
advances of approximately £283.5 billion, representing the second largest
provider of mortgages and savings in the UK.
Nationwide has grown over time through a series of historical acquisitions to
become the UK's largest building society. It remains wholly committed to being
a building society and a modern mutual that meets its customers' and members'
banking needs to a high standard.
The Nationwide Board believes that the Acquisition will enable Nationwide to
accelerate its strategy, and broaden and deepen its products and services
faster than could be achieved organically, whilst providing a return that will
further support Nationwide's financial strength and deliver greater value to
its customers and members. In particular:
· Customers, Lending and Deposits: Virgin Money is the UK's sixth
largest bank by total assets, with a customer base of approximately 6.6
million and total lending of £72.8 billion, comprising a high-quality
mortgage portfolio of approximately £57.1 billion and deposit portfolio of
approximately £67.3 billion. The Acquisition will enable Nationwide to
increase its scale in its core lending and deposit markets and strengthen
Nationwide's position as one of the UK's leading providers of mortgages,
savings and current accounts.
· Credit Cards: Virgin Money has a strong unsecured lending business,
with £6.7 billion of balances, including an estimated 8.6 per cent. market
share of UK credit cards, which the Nationwide Board believes will complement
Nationwide's existing product offering and unsecured lending.
· Business Banking: The Nationwide Board believes that Virgin Money's
£9.0 billion of existing business lending balances and 'Business Current
Account' will enable Nationwide to build on its existing business savings
proposition, with a broader business banking offering to support Nationwide's
growth and diversify its sources of funding.
The Nationwide Board believes that the Acquisition of Virgin Money represents
a compelling opportunity to deploy capital for the benefit of its current and
future members, and that Virgin Money's purpose and principles are well
aligned with those of Nationwide.
The Acquisition is expected to create a combined group with enhanced financial
strength, including through access to greater diversity of funding, notably
from business deposits, and the opportunity to generate improved returns.
Nationwide expects to be able to capitalise on this financial strength to
support the continued provision of its 'Fairer Share Payment' to eligible
Nationwide members, and member financial benefits via mortgage and savings
rates that are, on average, better than the market average, along with other
incentives.
4. Arrangements with Virgin Enterprises, Virgin Red, Virgin Group and
Vieco Investments
TMLA Amendment Agreement
Virgin Money licenses certain rights to use the "Virgin Money" brand from
Virgin Enterprises pursuant to the TMLA. Nationwide recognises the significant
role that the "Virgin Money" brand has played in the development of Virgin
Money over time. However, as part of its longer-term integration strategy,
Nationwide intends for the Virgin Money business to re-brand over time.
Accordingly, prior to the date of this announcement, Nationwide and Virgin
Enterprises entered into the TMLA Amendment Agreement pursuant to which they
agreed to procure that the TMLA is amended shortly following Completion. The
amendment will be deemed to take effect from Completion.
The key terms of the TMLA (as it will be amended pursuant to the TMLA
Amendment Agreement) include:
· Termination: In substitution for the termination right that Virgin
Money would have been entitled to exercise under the terms of the existing
TMLA within 60 days of Completion, the TMLA will terminate automatically on
the fourth anniversary of Completion, following which the Virgin Money
business will have a two-year period to re-brand (the "Cessation Period").
· Exit fee: In substitution for the exit fee arrangements under the
existing TMLA, an exit fee of £250 million will be payable by Virgin Money to
Virgin Enterprises in two tranches: £125 million will be payable within 12
Business Days of Completion, with a second instalment of £125 million payable
no later than the first anniversary of Completion.
· Royalties: Virgin Money will continue to pay royalties to Virgin
Enterprises at the current rate until the start of the first calendar quarter
following Completion, from which point annual royalties will be fixed at £15
million (paid quarterly). No royalties will be payable during the Cessation
Period, save where the TMLA is terminated prior to the fourth anniversary of
Completion. In that case, whether royalties are payable during the Cessation
Period will be determined based on the circumstances of that early termination
(in line with certain provisions of the existing TMLA).
· Commitments to the Virgin Money business: From Completion until
termination of the amended TMLA, Virgin Money will assume certain obligations
to promote and enhance the Virgin Money Group's business carried on under the
"Virgin Money" brand by continuing to evolve product lines and accept new
customers, by enhancing the Virgin Money customer experience and by dedicating
a budget of £20 million per year to the enhancement of the Virgin Money
Group's business, focussing on enhancing the customer experience, improving
the digital customer proposition and marketing. In addition, Virgin Money and
Virgin Enterprises will form a "rebrand & migration" committee, whose
members will include the CEO of Nationwide, to provide oversight over the
rebranding of certain Virgin Money assets and accounts between Completion and
the start of the Cessation Period, as well as their migration to other
Combined Group entities as part of any post-Completion reorganisation. Plans
for pre-Cessation Period rebranding and migration activities will require
approval from Virgin Enterprises (which may only be withheld if Virgin
Enterprises, acting reasonably, determines that the activities could have an
adverse effect on the Virgin brands (including the "Virgin Money" brand), the
reputation of Virgin Enterprises and its group or the customer experience for
any of their customers).
· Financial services flexibility for Virgin Red: From Completion,
certain exclusivity provisions of the TMLA that currently operate to restrict
Virgin Red's freedom to use the "Virgin Red" and "Virgin Points" brands in
relation to financial services and products offered by third parties will end
immediately, save that: (i) Virgin Red will not be permitted to use the
"Virgin Red" or "Virgin Points" brands directly on the following core
products: mortgages, savings accounts and ISAs, investment products, loans,
current accounts and business banking products; (ii) if Virgin Red wishes to
use the "Virgin Red" or "Virgin Points" brands directly on any financial
services or products that are not the core products listed in (i) above but
which require a financial services partner, the Combined Group will be given a
reasonable opportunity to pitch for that role; and (iii) in using the "Virgin
Red" or "Virgin Points" brands directly on any financial services or products,
Virgin Red will seek to minimise customer confusion. To ensure consistency
with the amendments to the TMLA described above, it has also been agreed that,
from Completion, Virgin Money will not enforce any term of its co-brand
agreement with Virgin Atlantic Airways Limited relating to co-branded credit
cards so as to prevent: (i) any use of the "Virgin Red" or "Virgin Points"
brands that is permitted under the amended TMLA; or (ii) certain arrangements
that allow the conversion of loyalty points between schemes or the earning or
spending of loyalty points in the purchase of goods or services.
· Governance: From Completion, Virgin Enterprises will cease to have
a right to appoint a director to the Virgin Money Board, but will instead be
entitled to appoint an observer to the Virgin Money Board until termination of
the amended TMLA.
Virgin Red loyalty programme
Prior to the date of this announcement, Nationwide and Virgin Enterprises held
discussions regarding a potential partnership relating to the expansion of the
"Virgin Red" loyalty programme to customers of the Combined Group. Nationwide
and Virgin Enterprises have not entered into any definitive agreement relating
to any such partnership; however, they remain excited by the opportunity to
harness the appeal of the "Virgin Red" brand in connection with a loyalty
points programme for the enlarged customer base of the Combined Group and
intend to resume their discussions following Completion, once Nationwide has
assumed control of the Virgin Money business. For the avoidance of doubt, in
light of the Scheme process and the requirements of the Takeover Code,
Nationwide, Virgin Enterprises and Virgin Red are restricted in their ability
to negotiate or agree definitive agreements prior to Completion.
As a result, Nationwide and Virgin Red have entered into the Virgin Red
Exclusivity Agreement. The key terms of the Virgin Red Exclusivity Agreement
include:
· Exclusivity: For the period from the date of the Virgin Red
Exclusivity Agreement until the date that is six months following Completion
(the "Exclusivity Period"), the parties will not enter into any agreement with
any third party for a fee-based personal current account loyalty points
programme in the UK. During the Exclusivity Period Nationwide also agrees:
(i) not to itself launch any new loyalty points programme in the UK for
fee-based personal current accounts; and (ii) to inform Virgin Red of any
proposed cashback programme and give Virgin Red a reasonable opportunity to
submit a proposal to, following Completion, partner with Nationwide with
respect to such cashback programme.
· Blackout period: During the period from the date of the Virgin Red
Exclusivity Agreement until Completion (the "Blackout Period"), the parties
will not agree or negotiate (or seek to agree or negotiate) the commercial
terms of any definitive agreement for a loyalty programme (or for any
associated marketing collaboration or the supply by Virgin Red of loyalty
technology or services) nor enter into any such definitive agreement.
· Feasibility assessment: During the Blackout Period, the parties will
be permitted to discuss, and each party agrees to dedicate appropriate time
and resources to the assessment of, certain matters relating to a loyalty
programme for the Combined Group, including: (i) the design and development of
a points-based customer rewards programme; (ii) research regarding customer
sentiment towards such a programme; (iii) discussing cashback programmes where
Virgin Red may provide loyalty technology and services (where available); (iv)
considering and developing options for collaboration in respect of certain
marketing activities; and (v) developing an understanding of the required
technical systems and architecture.
· Good faith negotiations: During the period from Completion until the
end of the Exclusivity Period, the parties will work together in good faith,
and use reasonable endeavours, to agree and enter into a definitive agreement
for a points-based loyalty programme relating to certain fee-based personal
current accounts of the Combined Group in the UK. If the parties so agree, a
definitive agreement may also include: (i) the parties collaborating in
relation to certain marketing activities; (ii) opportunities for certain
points-based offers or incentives for customers; and/or (iii) Virgin Red
supplying certain loyalty technology or services to Nationwide.
· Termination: The Virgin Red Exclusivity Agreement will terminate,
amongst other things: (i) if the Acquisition is withdrawn or lapses in
accordance with its terms; (ii) if the parties enter into a definitive
agreement with respect to a fee-based personal current account loyalty points
programme in the UK; (iii) if the end of the Exclusivity Period is reached
without the parties entering into any such definitive agreement; or (iv) upon
notice from Nationwide, if Virgin Enterprises does not enter into the deed of
amendment in respect of the TMLA (as attached to the TMLA Amendment Agreement
in agreed form) on or before the 10(th) Business Day following Completion or
otherwise materially breaches the TMLA Amendment Agreement. Virgin Red will
also be entitled to terminate the Virgin Red Exclusivity Agreement at any time
upon 10 Business Days' notice to Nationwide.
At this stage, there can be no certainty that any definitive agreement
relating to a relevant loyalty programme will be entered into following
Completion, nor as to the terms of any such agreement.
Shareholder approval
The amendment of the TMLA pursuant to the TMLA Amendment Agreement and the
Virgin Red Exclusivity Agreement must be approved by the passing of the Virgin
Resolution, being an ordinary resolution of the Independent Virgin Money
Shareholders (which requires more than 50 per cent. of the votes cast by
Independent Virgin Money Shareholders on a poll, whether in person or by
proxy, to be cast in favour) for the purposes of Note 2 on Rule 16.1 of the
Takeover Code. Virgin Group and Vieco Investments (an entity controlled by Sir
Richard Branson), both of which hold Virgin Money Shares, will not be able to
vote on the Virgin Resolution. The passing of the Virgin Resolution is a
non-waivable condition to the Acquisition and, if not passed, the Acquisition
will lapse and will not proceed to Completion.
Further details regarding the TMLA (as amended pursuant to the TMLA Amendment
Agreement), the Virgin Red Exclusivity Agreement and the Virgin Resolution
will be set out in the Scheme Document.
Irrevocable undertakings
Nationwide has also received from Virgin Group and Vieco Investments
irrevocable undertakings to vote in favour (or procure the voting in favour,
as applicable) of the Scheme at the Court Meeting and the Acquisition
Resolution(s) (being Resolutions other than the Virgin Resolution) to be
proposed at the General Meeting (or in the event that the Acquisition is
implemented by way of a Takeover Offer, to accept or procure the acceptance of
such Takeover Offer) in respect of 188,852,373 Virgin Money Shares in
aggregate, representing approximately 14.6 per cent. of Virgin Money's total
issued share capital.
This announcement has been made with the consent of Virgin Enterprises, Virgin
Red, Virgin Group and Vieco Investments.
5. Recommendation
The Virgin Money Directors, who have been so advised by Goldman Sachs
International and J.P. Morgan Cazenove as to the financial terms of the
Acquisition, consider the terms of the Acquisition to be fair and reasonable.
In providing their advice to the Virgin Money Directors, Goldman Sachs
International and J.P. Morgan Cazenove have taken into account the commercial
assessments of the Virgin Money Directors. Goldman Sachs International and
J.P. Morgan Cazenove are acting as the independent financial advisers to
Virgin Money for the purposes of providing independent advice to the Virgin
Money Directors on the Acquisition under Rule 3 of the Takeover Code.
Accordingly, the Virgin Money Directors intend to recommend unanimously that
Virgin Money Shareholders vote in favour of the Scheme at the Court Meeting
and the Acquisition Resolution(s) to be proposed at the General Meeting (or in
the event that the Acquisition is implemented by way of a Takeover Offer,
accept such Takeover Offer) as the Virgin Money Directors who are interested
in Virgin Money Shares have irrevocably undertaken to do in respect of their
entire beneficial holdings of 1,945,304 Virgin Money Shares representing, in
aggregate, approximately 0.2 per cent. of Virgin Money's total issued share
capital.
The Independent Virgin Money Directors also intend to recommend unanimously
that the Independent Virgin Money Shareholders vote in favour of the Virgin
Resolution as the Independent Virgin Money Directors who are interested in
Virgin Money Shares have irrevocably undertaken to do in respect of their
entire beneficial holdings of 1,920,304 Virgin Money Shares representing, in
aggregate, approximately 0.1 per cent. of Virgin Money's total issued share
capital. The terms of the TMLA Amendment Agreement and the Virgin Red
Exclusivity Agreement are considered by Goldman Sachs International and J.P.
Morgan Cazenove to be fair and reasonable. In forming this view, Goldman Sachs
International and J.P. Morgan Cazenove have taken into account the commercial
assessments of the Independent Virgin Money Directors. The passing of the
Virgin Resolution forms a non-waivable condition to the Acquisition and, if
not passed, the Acquisition will lapse and will not proceed to Completion.
Sara Weller, the Virgin Money Director who is appointed to the Virgin Money
Board as a representative of Virgin Enterprises, has not been involved in
Virgin Money Board discussions relating to aspects of the Acquisition
specifically concerning the TMLA, the "Virgin Money" brand, the Virgin Red
Exclusivity Agreement or the Independent Virgin Money Directors'
recommendation in respect of the Virgin Resolution.
6. Background to and reasons for the recommendation
Introduction
Since the 2018 merger of CYBG PLC and Virgin Money Holdings (UK) plc to create
Virgin Money, the business has pursued a purpose-led ambition to disrupt the
status quo in UK banking, and, since 2021, become the UK's best digital bank.
Virgin Group has supported Virgin Money throughout its evolution and remains
the largest shareholder of Virgin Money.
Virgin Money's strategy for the initial period following the 2018 merger
included a focus on integration, rebranding and growth in target segments,
which supported a significant improvement in financial performance despite the
disruption from the global pandemic. Virgin Money moved from a statutory loss
before tax of £(232) million in FY2019 to a statutory profit before tax of
£417 million in FY2021, which facilitated capital distributions to
shareholders.
Since FY2021, Virgin Money has made progress in delivering a three-year
programme of change and investment towards the ambition of becoming the UK's
best digital bank, while targeting profitable growth, further cost-efficiency
and capital distributions. Despite the uncertain backdrop, including
significantly higher inflation and a changing interest rate environment,
Virgin Money increased operating income from £1.6 billion in FY2021 to £1.9
billion in FY2023 supported by continued growth in key target segments.
Since the 2018 merger, Virgin Money became the first new tier 1 bank since the
global financial crisis in 2008, requiring further investment in its
capabilities. Virgin Money has also adopted additional measures to drive
strong and sustainable returns, including enhancing digital capabilities, new
products and propositions, and a further strengthened Executive Leadership
Team. This includes announcing an approximately £130 million investment over
three years in its Financial Crime Prevention Programme, offset by increasing
the target for the existing three-year cost savings programme to approximately
£200 million. As a result of these actions and improved income performance,
Virgin Money's underlying cost:income ratio has reduced from 58 per cent. in
FY2021 to 52 per cent. in FY2023.
Virgin Money's strategy is to deliver attractive and sustainable returns for
shareholders, including the ambition to deliver double-digit returns in the
medium term, alongside realising announced cost, growth and capital returns
guidance. Virgin Money's results for the first quarter of FY2024 showed a
positive start to the financial year, with results in line with guidance, and
good strategic and financial momentum. The Virgin Money Board believes that
delivery against this strategy has the potential to underpin attractive and
sustainable returns for Virgin Money Shareholders.
Proposals for Virgin Money
In late January 2024, Nationwide approached the Virgin Money Board with a
non-binding proposal to acquire Virgin Money which was rejected. Following a
series of revised proposals from Nationwide, Virgin Money and Nationwide
jointly announced on 7 March 2024 a potential acquisition of Virgin Money by
Nationwide at a total value of 220 pence per Virgin Money Share.
The Virgin Money Directors remain confident in the prospects of the Virgin
Money Group and the resulting value opportunity for all shareholders. However,
the Virgin Money Directors have carefully assessed the Acquisition against a
number of criteria, including:
· the value from delivery of the strategy and forecasts for Virgin
Money, including in the context of the broader operating environment in UK
banking;
· execution risk and upsides from delivery of the Virgin Money
Group's strategy;
· an assessment of both fundamental value as well as market-based
value, reflecting valuation levels for the UK banking sector as of now and
over time; and
· the feasibility of delivering other strategic outcomes for Virgin Money
including alternative business combinations.
The Virgin Money Directors, supported by its two independent financial
advisers, unanimously intend to recommend the Acquisition to Virgin Money
Shareholders. Amongst other factors, the Virgin Money Directors note:
· that the Acquisition would compensate shareholders for the
fundamental value of the Virgin Money Group;
· that the Acquisition would provide an opportunity for Virgin Money
Shareholders to realise the medium-term value from delivery of the standalone
strategy on an accelerated basis, in cash;
· the inherent uncertainty in delivering the standalone strategy,
including macro-economic risks, lower interest rate environment, a competitive
banking landscape with rising regulatory expectations, and execution risks
within the stated strategy;
· the premium offered of 38 per cent. to the Closing Price on 6 March
2024 (the last Business Day before the commencement of the Offer Period) and
40 per cent. to the three-month volume-weighted average price to the same
date; and
· the implied multiple of 0.7x Virgin Money's tangible book value as
at 31 December 2023, which represents a significant premium to Virgin Money's
equivalent median multiple of 0.5x over the period from 15 October 2018 (being
the completion of the merger) to 6 March 2024 (being the last Business Day
before the commencement of the Offer Period). The Virgin Money Directors
considered the prospects for an increase in this multiple for a listed Virgin
Money Group, as well as the uncertainty of the scale and timing of any such
increase.
In addition to the financial terms of the Acquisition, the Virgin Money
Directors also considered its wider responsibilities to stakeholders of Virgin
Money including customers, employees, regulators and shareholders.
7. Irrevocable undertakings
Taking together the irrevocable undertakings received from the Virgin Money
Directors, Virgin Group and Vieco Investments, Nationwide has received
irrevocable undertakings to vote, or procure the voting, in favour of the
Scheme at the Court Meeting and the Acquisition Resolution(s) to be proposed
at the General Meeting (or in the event that the Acquisition is implemented by
way of a Takeover Offer, to accept or procure the acceptance of such Takeover
Offer) in respect of a total of 190,797,677 Virgin Money Shares, representing,
in aggregate, approximately 14.7 per cent. of the total issued share capital
of Virgin Money.
Further details of these irrevocable undertakings are set out in Appendix 3 to
this announcement.
8. Nationwide's intentions for the Virgin Money business and the Combined
Group
Strategic plans for Virgin Money
Following the Acquisition, Nationwide intends to remain a building society and
a modern mutual that will be better placed than before to deliver sustainable
financial benefits to its customers and members. The Nationwide Board expects
the Combined Group to bring the benefits of fairer banking and mutual
ownership to more people in the UK.
Nationwide will seek to integrate Virgin Money gradually, over multiple years,
into the Combined Group, bringing together the best of both organisations.
Nationwide will prioritise good customer outcomes and effective oversight,
following the completion of comprehensive planning and engagement with
relevant stakeholders. In the medium term, Virgin Money will continue to
operate as a separate legal entity within the Combined Group, with a separate
board of directors and a separate banking licence held by Clydesdale Bank.
Nationwide intends that the Combined Group will retain the "Virgin Money"
brand in the medium term, for the purposes of Virgin Money products and
services, but has agreed with Virgin Enterprises that it will cease doing so
over a six-year period from Completion, by which point Nationwide will have
re-branded the Virgin Money business (as further set out in paragraph 4 of
this announcement).
It is the Nationwide Board's intention that, over time, some of the key
benefits of Nationwide's mutual business model will also become available to
Virgin Money's customers, including through enhanced service performance. In
the medium term, customers of the Combined Group will benefit from
Nationwide's continuing commitment to, and investment in, existing branches,
and leading levels of customer service. Nationwide's 'Branch Promise', coupled
with the addition of Virgin Money's branches, will preserve customers' ability
to access cash and continue to provide them with a choice as to how to
transact.
Nationwide does not intend for customers of Virgin Money to automatically
become members of Nationwide for at least the twelve months following
Completion, although Virgin Money customers who open a Nationwide
member-eligible product will become Nationwide members. Nationwide intends to
consider options for transferring certain Virgin Money customers to Nationwide
over the medium to long term, whilst avoiding customer disruption; following
any such transfer, those qualifying Virgin Money customers would become
Nationwide members.
Nationwide is committed to maintaining its breadth of coverage and over time,
the Combined Group's customers are expected to benefit from the enlarged range
of products and propositions on offer. In the long term, Nationwide will
consider options to optimise the product range of, and make available business
banking, accounts for clubs and charities and wider credit card offerings to
customers of, the Combined Group.
Nationwide remains committed to the delivery of existing regulatory,
operational resilience, and core service programmes across both Nationwide and
Virgin Money. During integration, Nationwide will explore opportunities to
achieve cost synergies across the Combined Group where possible (including
through the expected headcount reductions referred to below, as well as the
rationalisation of technology and systems), whilst maintaining its focus on
good customer outcomes. As a mutual, any savings will contribute to
Nationwide's financial strength, helping it to deliver value for its customers
and members. That financial strength will also support Nationwide's
commitment to share its success with its customers and members, including
through future 'Fairer Share Payments' to eligible Nationwide members.
Prior to this announcement, and consistent with market practice, Nationwide
has been granted access to Virgin Money's senior management for the purposes
of confirmatory due diligence. However, as is customary, Nationwide has not
yet had access to sufficiently detailed information to finalise its plans
regarding the integration of the Combined Group. Nationwide expects to
formulate these specific plans only following comprehensive consultation with
relevant stakeholders.
Therefore, following Completion, Nationwide intends to work with Virgin
Money's management to undertake a detailed evaluation of the Virgin Money
Group (the "Review"). The Review will include, among other considerations, an
appraisal of the short and long-term objectives, strategy, and potential of
the Virgin Money Group.
The aim of the Review will be to validate Nationwide's assumptions and
understandings regarding the business of the Virgin Money Group which have
been developed through the management meetings held as part of its
confirmatory due diligence exercise.
Clydesdale Bank and the other members of its ring-fenced sub-group are subject
to restrictions on their business that are similar to those imposed on
Nationwide and other building societies by the Building Societies Act 1986.
As part of the Review, Nationwide will take appropriate measures to ensure
that the activities of the Virgin Money Group following Completion are aligned
with those restrictions, which could include changes to certain risk
management products offered by the Virgin Money Group to corporate customers.
Nationwide expects that the Review will be completed within approximately
eighteen months from Completion.
Employees and management
Nationwide values the skills and experience of Virgin Money's approximately
7,300 full time equivalent workforce and believes the Acquisition represents
an opportunity to harness the talent of this group. Nationwide's workforce,
including members of its management team, comprises people who joined the
business as part of prior acquisitions, demonstrating the opportunity to build
a strong and diverse employee base by bringing two organisations together.
Nationwide is committed to helping Virgin Money's people be at their best and
thrive, building on the existing culture of Virgin Money which seeks to
promote high performance, and to help colleagues feel supported and develop
rewarding careers.
As part of the Review, Nationwide intends to assess the workforce requirements
of the Combined Group. Nationwide expects the Combined Group's headcount and
resources to be well-positioned to meet the demands and expectations of its
customer base, and does not anticipate any material change in the balance of
skills and functions of employees and management of the Combined Group.
Nationwide does not intend to make any material changes to the size of the
Virgin Money employee base during the twelve months following Completion.
However, over that period, it is currently expected that there may be some
limited workforce changes to reduce the size of overlapping central functions
relating to Virgin Money ceasing to be a standalone publicly listed company,
as part of the broader integration of the Combined Group. The evaluation of
any further workforce changes will form part of the Review and would only be
implemented over the medium term. All workforce changes would be subject to
comprehensive planning and engagement with affected employees and their
representatives, including as required by applicable law.
Nationwide confirms that, following Completion, it will safeguard the existing
contractual and statutory rights of Virgin Money employees, including pension
arrangements and redundancy policies, and that Nationwide will recognise the
continuous service of Virgin Money employees. As part of the Review, an
assessment of the differences between Virgin Money's and Nationwide's
employment terms, conditions and policies will be undertaken. The outcome of
that assessment will be used to inform any alignment of terms, with any
alignment only taking place following comprehensive consultation with affected
employees and their representatives.
Nationwide values the importance of effective governance and independent
oversight. The Nationwide Board and Board-level committees will serve as those
of the Combined Group, with responsibilities expanded to provide governance
and oversight on a consolidated basis.
David Duffy, CEO of Virgin Money, will step down from his position, effective
from Completion. Chris Rhodes, CFO of Nationwide, will take on the position of
CEO of Virgin Money, with Muir Mathieson, Deputy CFO and Treasurer of
Nationwide, becoming CFO of Nationwide. Both appointments are subject to
regulatory approval and will report directly into Debbie Crosbie as CEO.
Nationwide has not entered into, nor had any discussions regarding, any form
of incentive arrangements with members of Virgin Money's management, but
expects to put in place appropriate incentive arrangements following
Completion of the Acquisition.
Pensions
Clydesdale Bank sponsors the Yorkshire & Clydesdale Bank Pension Scheme, a
defined benefit occupational pension scheme, which is closed to new members
but remains open to future accrual for a small number of employees (the "DB
Scheme"). Nationwide's intention is for employer contributions to the DB
Scheme and current arrangements for the accrual of benefits to continue in
line with current requirements, and it intends to work constructively with the
trustees of the DB Scheme going forward.
Virgin Money also currently operates a defined contribution pension scheme.
Nationwide's intention is to maintain contribution rates in relation to Virgin
Money's defined contribution pension scheme for at least the twelve months
following Completion.
Locations of business, headquarter functions and fixed assets
Nationwide has the largest single-brand branch network in the UK and is
committed to maintaining its breadth of coverage. Nationwide will extend its
'Branch Promise', and as a result it will retain a Nationwide branch
everywhere one is present, until at least the start of 2028. In addition, from
Completion, Nationwide intends to retain a Virgin Money branch everywhere one
is present, until at least the start of 2028. This will be subject to any
circumstances beyond Nationwide's control and any relevant plans and proposals
for branch closures that have already been approved by Virgin Money, and which
are ongoing as at Completion. Nationwide intends initially to operate the
Nationwide and Virgin Money branch networks separately, with the potential for
integration informed by the outcomes of the Review and subsequent integration
activities.
Nationwide values Virgin Money's ongoing office presence in Glasgow and
Newcastle, and it intends to maintain a presence there in the medium term.
Over that period, Nationwide intends to explore the scope for operational
synergies through the simplification and optimisation of the Combined Group's
office buildings, in order to drive efficiencies and effectiveness across the
Combined Group.
Save for its technology estate (referred to below), Virgin Money does not have
any other material fixed assets.
Technology
Nationwide will take a customer-centric and safety-first approach to the use
and integration of Virgin Money's technology. Nationwide intends, over the
medium term, to assess the systems of both organisations and rationalise those
towards an optimal solution, to fulfil service commitments to the Combined
Group's customers. A detailed assessment as to the nature of this
rationalisation is expected as part of the Review.
Research and development
Virgin Money does not currently have a dedicated research and development
function and Nationwide has no plans in this regard.
Trading facilities
Virgin Money's Shares are currently traded on the London Stock Exchange main
market, and Virgin Money CDIs are currently traded on the ASX. Nationwide
intends to cancel these arrangements with effect from Completion.
No post-offer undertakings
No statements in this paragraph 8 are "post-offer undertakings" for the
purposes of Rule 19.5 of the Takeover Code.
9. Virgin Money Board's views on Nationwide's Intentions to Virgin Money
In considering the recommendation of the Acquisition to Virgin Money
Shareholders, the Virgin Money Directors have taken into account the
statements and assurances made by Nationwide, as set out in paragraph 8 above,
regarding their future intentions for the business, employees, customers and
community of Virgin Money. In considering those statements and assurances, the
Virgin Money Directors have focused on the interests of Virgin Money employees
and have considered the commitments made by Nationwide to protect employees'
rights with regard to employment terms, redundancies and pension obligations.
Further, the Virgin Money Directors place value on Nationwide's commitment to
maintaining its breadth of coverage and service, with customers benefitting
over time from the enlarged range of products and propositions on offer.
10. Information on Virgin Money
Virgin Money is a Tier 1 bank with c.6.6 million retail and business customers
across the UK, bringing the best of the "Virgin Money" brand to make banking
better and enable customers to achieve their financial goals. Led by its
purpose of 'making you happier about money', Virgin Money offers a range of
straightforward, award-winning products including current accounts, credit
cards, savings, investments, mortgages, pensions, loans and more.
Rewarding, digital-first customer experiences are central to its ambition of
becoming the UK's best digital bank, supported by a network of stores, contact
centres and relationship managers. Through the Virgin Money Foundation and key
partnerships, the bank also delivers positive change in society as part of its
progressive sustainability and ESG agenda.
An inclusive and ambitious culture for approximately 7,300 full time
equivalent colleagues is fostered throughout the organisation, encouraging
colleagues to work in a healthy, flexible, digitally led environment.
Headquartered in Glasgow with major offices in Newcastle upon Tyne and London,
Virgin Money is a FTSE 250 company, dual-listed on the London Stock Exchange
(VMUK) and the Australian Securities Exchange (VUK).
11. Current trading and Virgin Money auditor update
As set out in its trading update on 6 February 2024, in Q1 FY2024 Virgin Money
delivered continued growth in relationship deposits and target lending
segments, whilst maintaining a stable margin, with ongoing cost efficiencies
mitigating inflation. Trading in Q2 FY2024 remains in line with the trends set
out in the Q1 FY2024 trading update. Net interest margin continues to be
resilient, despite competition and the interest rate backdrop, supported by
ongoing effective interest rate outperformance in the credit cards portfolio.
Costs in Q2 FY2024 will reflect the timing of annual wage rises and the new
bank levy in the quarter. Asset quality trends remain broadly consistent with
those set out as part of the Q1 FY2024 trading statement and Virgin Money
remains on track to conclude its review of SICR (significant increases in
credit risk) criteria in respect of its credit card portfolio. During Q2
FY2024, Virgin Money has maintained a robust liquidity and funding position,
with a strong capital position to support ongoing growth and returns.
Over the remainder of FY2024, lower interest rates and competitive market
dynamics are expected to be a headwind to net interest margin, offset by
reinvestment of the structural hedge, growth in target segments and ongoing
credit cards effective interest rate outperformance. The impact of persistent
inflation and ongoing investment, are expected to be headwinds to cost
performance, partially mitigated by Virgin Money's existing cost saving
programme.
On 19 March 2024, Virgin Money's auditors, PricewaterhouseCoopers LLP, gave
notice that they would be resigning with effect from 19 March 2024 in light of
the possible Acquisition announcement by Virgin Money on 7 March 2024. The
statement of reasons in connection with PricewaterhouseCoopers LLP's
resignation will be sent to Virgin Money Shareholders in accordance with
section 519 of the Companies Act. The Virgin Money Board is currently in the
process of reappointing Ernst & Young LLP to fill the resulting vacancy,
subject to the completion of customary onboarding processes. As a consequence
of the Acquisition and change in auditors, Virgin Money now expects to release
an update on trading in May before releasing its interim results in June 2024.
12. Information on Nationwide
Nationwide is the world's largest building society, with over 17 million
customers, 16 million of whom have a current account, mortgage or savings
product, and are therefore members of the Society. Nationwide is owned by its
members and focuses on providing banking products and services to its
customers. Nationwide has over 18,000 employees, including those based in its
headquarters in Swindon, and those working in its network of over 600 branches
across the UK. The combination of its mutual ownership model and scale puts
Nationwide in a unique position within the UK financial services ecosystem.
Following the Acquisition, Nationwide will remain a building society.
Nationwide is the UK's third largest mortgage provider and holds almost £1 in
every £10 saved in the UK, as well as one in ten of the UK's current
accounts. It also supports landlords and those who rely on the private rented
sector for their long-term housing needs through its buy to let business, The
Mortgage Works. In addition, Nationwide offers a comprehensive range of wider
retail financial services and products, including credit cards, personal loans
and insurance. These offerings diversify its income, and help it give value
back to its customers, through better product pricing than the market average
and better service than its peers.
Nationwide's purpose is 'Banking - but fairer, more rewarding, and for the
good of society'. The Nationwide Board believes that its mutual ownership
model enables it to balance its need to retain sufficient profit to remain
financially strong, with its commitment to share its success with its
customers and members. It aims to achieve this through its four strategic
drivers:
· More rewarding relationships - developing deeper, broader, more
lifelong relationships that provide value in banking;
· Simply brilliant service - providing personalised, trusted
service, at every touchpoint;
· Beacon for mutual good - having a meaningful impact on customers,
Members, communities and society, by being bigger and doing better; and
· Continuous improvement - operating simply and efficiently, to respond
to customer and Member needs at pace.
In 2023, Nationwide gave 3.4 million eligible members a share of its profits
through its 'Fairer Share Payment'. The provision of future Fairer Share
Payments will depend on Nationwide's ongoing financial performance. Nationwide
will confirm the level of any Fairer Share Payment in respect of its current
financial year, as well as the relevant member eligibility criteria, after its
financial year-end.
13. Capital structure and pro-forma prudential ratios
Nationwide expects the Combined Group to have a strong pro-forma capital
position with a common equity tier 1 ratio of approximately 20 per cent. and a
leverage ratio of approximately 5 per cent., both comfortably above regulatory
minimums. Nationwide also expects the Combined Group's liquidity ratios to be
well in excess of regulatory minimums.
These estimated pro-forma positions are illustrative only and have been
calculated using unaudited estimates of the position as at 30 September 2024
prepared by Nationwide. More information in relation to these estimates is set
out in Appendix 2 to this announcement.
The Combined Group will be subject to the consolidated supervision of the PRA
under the UK Capital Requirements Regulation. It is not anticipated that the
Acquisition will require any immediate changes to the capital structure of the
Virgin Money Group or the Combined Group as a whole. Nationwide and Virgin
Money intend to simplify and align their capital structures over time as part
of broader integration planning.
14. Financing of the Acquisition
The cash Consideration necessary to satisfy the Acquisition in full will be
funded from Nationwide's existing cash resources. UBS, in its capacity as
financial adviser to Nationwide, is satisfied that sufficient resources are
available to Nationwide to satisfy in full the Consideration payable by
Nationwide to Virgin Money Shareholders pursuant to the Acquisition.
15. Share Plans
Participants in the Virgin Money Share Plans will be contacted regarding the
effect of the Acquisition on their rights under the Virgin Money Share Plans
and provided with further details concerning the proposals which will be made
to them in due course. Details of the proposals will be set out in the Scheme
Document (or, as the case may be, the Offer Document) and in separate letters
to be sent to participants in the Virgin Money Share Plans.
16. Offer-related Arrangements
Confidentiality Agreement between Nationwide and Virgin Money
On 29 February 2024, Nationwide and Virgin Money entered into the
Confidentiality Agreement in connection with the Acquisition, pursuant to
which, amongst other things, the parties gave certain undertakings to: (i)
subject to certain exceptions, keep information relating to the Acquisition
and each other party's group confidential and not to disclose it to third
parties; and (ii) use such confidential information only in connection with
the Acquisition. These confidentiality obligations will remain in force until
the earlier of: (i) the second anniversary of the date of the Confidentiality
Agreement; or (ii) the date of Completion.
Clean Team and Joint Defence Agreement between Nationwide, Virgin Money and
their respective external counsel
Nationwide, Virgin Money and their respective external counsel have entered
into a Clean Team and Joint Defence Agreement dated 4 March 2024, the purpose
of which is to ensure that the exchange and/or disclosure of certain materials
relating to the parties and in relation to, in particular, the anti-trust and
regulatory workstream only takes place between their respective external
counsel and external experts, and does not diminish in any way the
confidentiality of such materials and does not result in a waiver of any
privilege, right or immunity that might otherwise be available.
Clean Team Agreement between Nationwide and Virgin Money
Nationwide and Virgin Money have entered into a Clean Team Agreement dated 15
March 2024 which sets out, among other things, how confidential information
that is competitively sensitive can be disclosed, used or shared between
Nationwide's clean team individuals and/or external advisers retained by
Nationwide and Virgin Money's clean team individuals and/or external advisers
retained by Virgin Money.
Co-operation Agreement between Nationwide and Virgin Money
On 21 March 2024, Nationwide and Virgin Money entered into the Co-operation
Agreement in relation to the Acquisition. Pursuant to the Co-operation
Agreement:
· Nationwide has agreed to use all reasonable endeavours to obtain, and
make any necessary filings in relation to, the regulatory clearances and
authorisations necessary or advisable to satisfy the Conditions set out in
paragraphs 4(A), 4(B) and 4(D) (inclusive) of Part A of Appendix 1 as soon as
reasonably practicable and in any event by the Long Stop Date, subject to
certain customary carve-outs;
· the parties have agreed to (i) implement certain arrangements with
respect to the Virgin Money Share Plans and bonus arrangements; (ii) certain
provisions if the Acquisition should switch to a Takeover Offer; and (iii)
Virgin Money's redundancy policy (as it applies to Virgin Money's management
and employees) applying for a period of 12 months from the Effective Date; and
· Nationwide has also agreed to (i) provide Virgin Money with certain
information for the purposes of the Scheme Document and to otherwise assist
with the preparation of the Scheme Document; and (ii) certain restrictions
applicable to Nationwide during the Offer Period relating to the entry into or
amendment of agreements or arrangements with Virgin Group (or any of its
subsidiaries, including Virgin Enterprises) relating to the "Virgin Money"
brand.
The Co-operation Agreement shall terminate, amongst other things:
· if agreed in writing between Nationwide and Virgin Money at any
time prior to the Effective Date;
· upon written notice served by Nationwide to Virgin Money if (i) the
Virgin Money Board recommends or announces that it intends to recommend a
competing proposal or a competing proposal becomes effective or is declared
unconditional; and/or (ii) the Virgin Money Board's recommendation in respect
of the Acquisition changes in a manner that is adverse in the context of the
Acquisition; or
· upon written notice by either Nationwide or Virgin Money to the
other if (i) a competing offer becomes effective or is declared or becomes
unconditional; (ii) the Acquisition is withdrawn, terminates or lapses in
accordance with its terms; (iii) prior to the Long Stop Date, a Condition
which is either not capable of being waived or, where capable of being waived,
Nationwide has confirmed that it will not waive said Condition, becomes
incapable of satisfaction by the Long Stop Date in circumstances where
invocation of the relevant Condition is permitted by the Panel; (iv) unless
the Acquisition has switched to a Takeover Offer: (a) the Scheme is not
approved at the Court Meeting and/or the Resolution(s) are not approved at the
General Meeting or the Court definitively refuses to sanction the Scheme at
the Court Hearing; or (b) the General Meeting, the Court Meeting or the Court
Hearing is/are not held on or before the 22nd day after the expected date of
such meeting or hearing as set out in the Scheme Document (or such later date,
if any, as Nationwide and Virgin Money may agree, or (in a competitive
situation) as may be specified by Nationwide with the consent of the Panel,
and in each case that (if so required) the Court may allow); (v) if the
Acquisition is implemented by way of a Takeover Offer, the Resolution(s) are
not passed at the General Meeting; or (vi) if the Effective Date has not
occurred by the Long Stop Date (unless otherwise agreed by the parties in
writing, or required by the Panel).
17. Scheme process and publication of the Scheme Document
It is intended that the Acquisition will be effected by a Court-sanctioned
scheme of arrangement between Virgin Money and the Scheme Shareholders under
Part 26 of the Companies Act. Nationwide reserves the right, however, to
effect the Acquisition by way of Takeover Offer, subject to the consent of the
Panel and the terms of the Co-operation Agreement.
The purpose of the Scheme is to provide for Nationwide to become the owner of
the whole of the issued and to be issued share capital of Virgin Money. Under
the Scheme, the Acquisition is to be achieved by the transfer of the Scheme
Shares held by Scheme Shareholders to Nationwide in consideration for which
Scheme Shareholders (or, where CDN is the Scheme Shareholder, the holders of
Virgin Money CDIs representing the relevant Scheme Shares) will receive the
Consideration on the basis set out in paragraph 2 of this announcement. The
process involves, amongst other things, an application by Virgin Money to the
Court to sanction the Scheme.
The Acquisition will be subject to the Conditions and further terms and
conditions referred to in Appendix 1 to this announcement and to be set out in
the Scheme Document. Subject, amongst other things, to the satisfaction (or,
where applicable, waiver) of the Conditions, the Scheme will only become
Effective if, amongst other things, the following events occur on or before
the Long Stop Date:
· the approval by a majority in number of Scheme Shareholders,
present and voting (and entitled to vote) at the Court Meeting, whether in
person or by proxy, representing 75 per cent. or more in value of the Scheme
Shares held by those Scheme Shareholders (or the relevant class or classes
thereof) and the passing, at the General Meeting, of the Acquisition
Resolution(s) by Virgin Money Shareholders representing 75 per cent. or more
of the votes validly cast on the Acquisition Resolution(s) (the General
Meeting will be held immediately after the Court Meeting);
· the passing of the Virgin Resolution by Independent Virgin Money
Shareholders on a poll, whether in person or by proxy, representing more than
50 per cent. of the votes validly cast on the Virgin Resolution;
· certain regulatory approvals as described in Appendix 1 (including
approvals from the FCA and PRA (being the relevant regulators of the Virgin
Money Group's businesses), as well as the CMA) are obtained (or waived, as
applicable);
· following the Meetings, the Scheme is sanctioned by the Court
(with or without modification, and, if with modification, on terms agreed by
Nationwide and Virgin Money); and
· following such sanction, a copy of the Court Order is delivered
to the Registrar of Companies.
The circumstances in which the approval of Nationwide's members would be
required in relation to the Acquisition are set out under the Building
Societies Act 1986. Having taken appropriate legal and financial advice, the
Nationwide Board has determined that no such member approval is required.
Accordingly, the Acquisition will not be subject to any condition relating to
the passing of a resolution by Nationwide's members to approve the
Acquisition. Further, no additional conditionality will be permitted to be
introduced in relation to the Acquisition following the release of this
announcement under the Takeover Code, including any conditionality relating to
the approval of the Acquisition by Nationwide's members.
Upon the Scheme becoming Effective, it will be binding on all Virgin Money
Shareholders (including, for the avoidance of doubt, those Virgin Money CDI
Holders who are entitled to vote through CDN by executing and delivering a CDI
Voting Instruction Form), irrespective of whether or not they attended or
voted at the Meetings (and if they attended and voted, whether or not they
voted in favour) and the Consideration will be despatched by Nationwide to
Scheme Shareholders (or, where CDN is the Scheme Shareholder, to Virgin Money
CDI Holders representing the relevant Scheme Shares) no later than 14 days
after the Effective Date. In addition, share certificates in respect of the
Virgin Money Shares and CHESS holding statements or uncertificated holding
statements for Virgin Money CDIs will cease to be valid and entitlements to
Virgin Money Shares held within the CREST system and to Virgin Money CDIs
within the CHESS system will be cancelled.
Any Virgin Money Shares issued before the Scheme Record Time will be subject
to the terms of the Scheme. The Resolutions to be proposed at the General
Meeting will, amongst other matters, provide that the Articles be amended to
incorporate provisions requiring any Virgin Money Shares issued after the
Scheme Record Time (other than to Nationwide and/or its nominees) to be
automatically transferred to Nationwide on the same terms as the Acquisition
(other than terms as to timings and formalities). These provisions of the
Articles (as amended) will avoid any person (other than Nationwide and/or its
nominees) holding Virgin Money Shares after the Effective Date.
The Scheme Document will include full details of the Scheme, together with
notices of the Court Meeting and the General Meeting and the expected
timetable for the implementation of the Scheme. The Scheme Document will also
specify the action to be taken by Scheme Shareholders (and, in relation to
Scheme Shares in respect of which CDN is the Scheme Shareholder, holders of
the Virgin Money CDIs representing the relevant Scheme Shares). The Scheme
Document, together with accompanying Forms of Proxy (for Virgin Money Ordinary
Shareholders) and CDI Voting Instruction Forms (for Virgin Money CDI Holders)
will be published in due course. A short extension to the customary 28-day
period for publication of the Scheme Document has been requested of, and
consented to by, the Panel having regard to, amongst other things, the
availability of appropriate Court dates given the impact of the Court's Easter
vacation. Accordingly, it is expected that the Scheme Document will be
published no later than 30 April 2024.
The Acquisition will lapse if the Scheme does not become Effective by the Long
Stop Date.
Prior to the publication of the Scheme Document, Virgin Money will seek the
necessary permission from the Court to convene the Court Meeting. A Scheme
Convening Hearing before a High Court judge has been scheduled for 19 April
2024 for this purpose. At the Scheme Convening Hearing, amongst other things,
Virgin Money will determine with the Court whether, for the purposes of voting
at the Court Meeting, all Virgin Money Shareholders, including Virgin Group
and Vieco Investments, can vote together as one class. The Court will consider
whether the legal rights of Virgin Group and Vieco Investments, in the light
of the arrangements with Virgin Enterprises and Virgin Red described in
paragraph 4 above are sufficiently similar to the legal rights of the other
Virgin Money Shareholders, or whether a difference in legal rights makes it
more appropriate for Virgin Group and Vieco Investments to be distinguished as
a separate class of shareholders. Virgin Money and Nationwide consider that
all Virgin Money Shareholders should vote in a single class of shareholders.
The Scheme Convening Hearing is expected to take place at the Companies Court,
The Rolls Building, 7 Rolls Buildings, Fetter Lane, London EC4A 1NL, United
Kingdom, and the time of the hearing will be set out on HM Courts &
Tribunals Service's website at www.justice.gov.uk/courts/court-lists. Virgin
Money Shareholders have the right to attend in person or through counsel and
make representations at the Scheme Convening Hearing. Subject to, amongst
other things, the satisfaction (or, where applicable, waiver) of the
Conditions, it is expected that the Acquisition will become Effective during
Q4 2024.
The Scheme will be governed by English law. The Scheme will be subject to the
applicable requirements of the Takeover Code, the Panel, the FCA, the London
Stock Exchange (including pursuant to the Listing Rules) and the Registrar of
Companies.
18. Virgin Money CDI Holders and currency election
In this announcement, unless the context requires otherwise, references to
Virgin Money Shares include Virgin Money CDIs, references to Virgin Money
Shareholders include Virgin Money CDI Holders and references to Virgin Money
Shareholders voting in respect of the Scheme or the Resolutions or accepting a
Takeover Offer shall include Virgin Money CDI Holders procuring the same.
Virgin Money Shareholders will be able to elect to receive their Consideration
in Australian dollars or New Zealand dollars instead of pound sterling (based
on the prevailing exchange rates at a date to be determined), further details
regarding which will be set out in the Scheme Document.
19. Dividends
If, on or after the date of this announcement and before the Effective Date,
other than the FY2024 Dividend and any repurchases of Virgin Money Shares by
Virgin Money pursuant to the Buyback Programme, any dividend, distribution or
other return of capital or value is announced, declared, made or paid by
Virgin Money or becomes payable by Virgin Money in respect of the Virgin Money
Shares, Nationwide reserves the right to reduce the Consideration that would
be payable for the Virgin Money Shares pursuant to the Acquisition by an
amount up to the amount of such dividend and/or distribution and/or other
return of capital or value. In such circumstances, Virgin Money Shareholders
would be entitled to receive and retain any such dividend and/or other
distribution and/or return of capital or value to which they are entitled.
20. Disclosure of interests
Except for the irrevocable undertakings referred to in paragraph 7 above and
(i) the 274 Virgin Money Ordinary Shares held by a close relative of Sally
Orton (being a person deemed to be acting in concert with Nationwide) and (ii)
the 927 Virgin Money Ordinary Shares held by Debbie Crosbie (being a person
deemed to be acting in concert with Nationwide), as at the date of this
announcement neither Nationwide, nor any of its directors, nor, so far as
Nationwide are aware, any person acting in concert (within the meaning of the
Takeover Code) with Nationwide:
· has any interest in, or right to subscribe for, any relevant
securities of Virgin Money; nor
· has any short position in respect of any relevant securities of
Virgin Money, including any short position under a derivative, any agreement
to sell, any delivery obligation or right to require another person to
purchase or take delivery of relevant securities of Virgin Money; nor
· has borrowed or lent any relevant securities of Virgin Money or entered
into any financial collateral arrangements relating to relevant securities of
Virgin Money; nor
· is party to any dealing arrangement of the kind referred to in
Note 11 of the definition of acting in concert in the Takeover Code in
relation to relevant securities of Virgin Money.
An "interest in" securities for these purposes arises, in summary, when a
person has long economic exposure, whether absolute or conditional, to changes
in the price of securities (and a person who only has a short position in
securities is not treated as interested in those securities). In particular, a
person will be treated as having an 'interest' by virtue of the ownership,
voting rights or control of securities, or by virtue of any agreement to
purchase, option in respect of, or derivative referenced to securities.
21. Cancellation of admission to trading of Virgin Money Shares on the
Official List and suspension and delisting of Virgin Money CDIs on the ASX
Prior to the Scheme becoming Effective, it is intended that an application
will be made to the FCA and the London Stock Exchange to, subject to the
Acquisition becoming Effective, cancel the listing of Virgin Money Shares on
the Official List and the trading of Virgin Money Shares on the London Stock
Exchange respectively, with effect from or shortly following the Effective
Date.
The last day of dealings in, and registration of transfers of, Virgin Money
Shares on the London Stock Exchange is expected to be the Business Day
immediately prior to the Effective Date and no transfers will be registered
after 6:00 p.m. (London time) on that date.
Virgin Money CDIs are currently traded on the ASX. It is intended that a
request will be made to the ASX to suspend trading in Virgin Money CDIs on the
ASX and delist the Virgin Money CDIs from the ASX with the suspension expected
to take effect at close of business on the day falling two ASX trading days
before the Scheme Record Date and the de-listing expected to take effect on or
shortly after the Effective Date.
On the Effective Date, Virgin Money will become a wholly-owned subsidiary of
Nationwide and share certificates in respect of Virgin Money Shares and CHESS
holding statements or uncertificated holding statements for Virgin Money CDIs
will cease to be valid and should be destroyed. In addition, entitlements held
within the CREST system to the Virgin Money Shares and entitlements held
within the CHESS system to Virgin Money CDIs will be cancelled on the
Effective Date.
Upon the Scheme becoming Effective, Nationwide will acquire the Virgin Money
Shares fully paid and free from all liens, charges, equitable interests,
encumbrances and rights of pre-emption and any other interests of any nature
whatsoever and together with all rights attaching thereto including the right
to receive and retain all dividends and distributions declared, made or paid
by reference to a record date after the Effective Date.
22. Consents
UBS, Goldman Sachs International and J.P. Morgan Cazenove have each given and
not withdrawn their consent to the publication of this announcement with the
inclusion herein of the references to their names in the form and content in
which they appear.
23. Documents available for inspection
Copies of this announcement and the following documents will, by no later than
12 noon on the business day following the date of this announcement, be
published on Nationwide's website at www.nationwide.co.uk/virgin-money/ and
Virgin Money's website at
www.virginmoneyukplc.com/investor-relations/announcements/:
· this announcement;
· the irrevocable undertakings referred to in paragraph 7 above and
further described in Appendix 3 to this announcement;
· the Confidentiality Agreement;
· the Clean Team and Joint Defence Agreement;
· the Clean Team Agreement; and
· the Co-operation Agreement.
The contents of any website referred to in this announcement are not
incorporated into and do not form part of this announcement.
24. General
Nationwide reserves the right to elect, with the consent of the Panel (where
necessary) and subject to the terms and conditions of the Co-operation
Agreement, to implement the Acquisition by way of a Takeover Offer for the
entire issued and to be issued share capital of Virgin Money not already held
by Nationwide as an alternative to the Scheme. In such an event, a Takeover
Offer will be implemented on substantially the same terms, so far as
applicable, as those which would apply to the Scheme. Whether the Acquisition
proceeds by way of the Scheme or a Takeover Offer, the Virgin Resolution must
be passed by more than 50 per cent. of the votes validly cast, whether in
person or by proxy, by Independent Virgin Money Shareholders at the General
Meeting in order for the Acquisition to proceed to Completion. Virgin Group
and Vieco Investments will not be permitted to vote on the Virgin Resolution.
In the event that the Acquisition is to be implemented by way of a Takeover
Offer, Virgin Money Shares will be acquired pursuant to the Takeover Offer
fully paid and free from all liens, charges, equitable interests, encumbrances
and rights of pre-emption and any other interests of any nature whatsoever and
together with all rights attaching thereto including the right to receive and
retain all dividends and distributions declared, made or paid by reference to
a record date after the Effective Date.
If the Acquisition is effected by way of a Takeover Offer and such Takeover
Offer becomes or is declared unconditional and sufficient acceptances are
received, Nationwide intends to: (i) request that the FCA and the London Stock
Exchange cancel the listing of Virgin Money Shares on the Official List and
the trading of Virgin Money Shares on the London Stock Exchange respectively;
(ii) request that the ASX suspend trading in Virgin Money CDIs on the ASX and
delist the Virgin Money CDIs from the ASX; and (iii) exercise its rights (to
the extent such rights are available) to apply the provisions of Chapter 3 of
Part 28 of the Companies Act to acquire compulsorily the remaining Virgin
Money Shares in respect of which the Takeover Offer has not been accepted.
The Acquisition will be subject to the Conditions and other terms set out in
Appendix 1 and to the full terms and conditions which will be set out in the
Scheme Document. Appendix 2 contains the bases of calculation and sources of
certain information contained in this announcement. Details of the irrevocable
undertakings received by Nationwide in connection with the Acquisition are set
out in Appendix 3 to this announcement. Certain terms used in this
announcement are defined in Appendix 4.
Enquiries:
Nationwide Building Society
Muir Mathieson, Deputy CFO and Treasurer
Sarah Abercrombie, Head of Investor Relations, Credit Ratings and Treasury
Sustainability
Media enquiries: Nationwide-UK@fgsglobal.com
Investor enquiries: Nationwide.treasury@Nationwide.co.uk
UBS (financial adviser to Nationwide) +44 (0)20 7567 8000
Sam Small
Ben Crystal
David Sissons
FGS Global (public relations adviser to Nationwide) +44 (0)20 7251 3801
James Murgatroyd
Charlie Chichester
Richard Webster-Smith
Sophia Johnston
Virgin Money UK PLC
Investors and Analysts
Richard Smith
+44 (0)7483 399303
Head of Investor Relations & Sustainability
richard.smith@virginmoney.com
Company Secretary
Lorna McMillan
+44 (0)7834 585436
Group Company Secretary
lorna.mcmillan@virginmoney.com
Media Relations
+44 (0)800 066 5998
Press Office
press.office@virginmoney.com
Goldman Sachs International (joint Rule 3 independent financial adviser and
joint corporate broker to Virgin Money) +44 (0)20 7774 1000
Anthony Gutman
Nimesh Khiroya
Ronan Breen
Bertie Whitehead
Pernille Thuesen
J.P. Morgan Cazenove (joint Rule 3 independent financial adviser and joint +44 (0)20 3493 8000
corporate broker to Virgin Money)
Conor Hillery
Dwayne Lysaght
Claire Brooksby
Ravin Mehta
Teneo (public relations adviser to Virgin Money)
Douglas Campbell (UK)
+44 (0)7753 136628
Julia Henkel (Australia)
+61 406 918080
Slaughter and May is acting as legal adviser to Nationwide in connection with
the Acquisition.
Clifford Chance LLP is acting as legal adviser to Virgin Money in connection
with the Acquisition.
Allen and Overy is acting as legal adviser to Virgin Group in connection with
the Acquisition.
Inside Information
This announcement contains inside information as stipulated under the Market
Abuse Regulation no 596/2014 (incorporated into UK law by virtue of the
European Union (Withdrawal) Act 2018 as amended by virtue of the Market Abuse
(Amendment) (EU Exit) Regulations 2019). Upon the publication of this
announcement via a regulatory information service, this inside information is
now considered to be in the public domain.
Further information
This announcement is for information purposes only and is not intended to and
does not constitute, or form any part of any offer, invitation or the
solicitation of an offer to purchase, otherwise acquire, subscribe for, sell
or otherwise dispose of any securities, or the solicitation of any vote or
approval in any jurisdiction, pursuant to the Acquisition or otherwise, nor
shall there be any sale, issuance or transfer of securities of Virgin Money in
any jurisdiction in contravention of applicable law. The Acquisition will be
made and implemented solely pursuant to the terms of the Scheme Document (or
if the Acquisition is implemented by way of a Takeover Offer, the Offer
Document), which will contain the full terms and conditions of the
Acquisition, including details of how to vote in respect of the Acquisition.
Any vote in respect of, or other response to, the Acquisition should be made
only on the basis of the information contained in the Scheme Document (or if
the Acquisition is implemented by way of a Takeover Offer, the Offer
Document).
Virgin Money and Nationwide will prepare the Scheme Document (or if the
Acquisition is implemented by way of a Takeover Offer, the Offer Document) to
be distributed to Virgin Money Shareholders. Virgin Money and Nationwide urge
Virgin Money Shareholders to read the Scheme Document (or if the Acquisition
is implemented by way of a Takeover Offer, the Offer Document) when it becomes
available because it will contain important information relating to the
Acquisition.
This announcement does not constitute a prospectus, prospectus equivalent
document or an exempted document.
The statements contained in this announcement are made as at the date of this
announcement, unless some other times is specified in relation to them, and
publication of this announcement shall not give rise to any implication that
there has been no change in the facts set forth in this announcement since
such date.
Disclaimers
This announcement does not constitute or form part of, and should not be
construed as, any public offer under any applicable legislation or an offer to
sell or solicitation of any offer to buy any securities or financial
instruments or any advice or recommendation with respect to such securities or
other financial instruments.
UBS AG London Branch ("UBS") is authorised and regulated by the Financial
Market Supervisory Authority in Switzerland. It is authorised by the PRA and
subject to regulation by the FCA and limited regulation by the PRA in the
United Kingdom. UBS is acting exclusively for Nationwide and no one else in
connection with the Acquisition. In connection with such matters, UBS will not
regard any other person as its client, nor will it be responsible to any other
person for providing the protections afforded to its clients or for providing
advice in relation to the Acquisition, the contents of this announcement or
any other matter referred to herein.
Goldman Sachs International ("GSI"), which is authorised by the PRA and
regulated by the FCA and the PRA in the United Kingdom, is acting for Virgin
Money and no one else in connection with the distribution of this document and
will not be responsible to anyone other than Virgin Money for providing the
protections afforded to clients of GSI, or for giving advice in connection
with the Acquisition or any matter referred to herein.
J.P. Morgan Securities plc, which conducts its UK investment banking business
as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised in the United
Kingdom by the PRA and regulated in the United Kingdom by the PRA and the FCA.
J.P. Morgan Cazenove is acting as joint financial adviser exclusively for
Virgin Money and no one else in connection with the matters set out in this
announcement and will not regard any other person as its client in relation to
the matters in this announcement and will not be responsible to anyone other
than Virgin Money for providing the protections afforded to clients of J.P.
Morgan Cazenove or its affiliates, nor for providing advice in relation to any
matter referred to herein.
Overseas jurisdictions
This announcement has been prepared in accordance with, and for the purposes
of complying with, English law, the Takeover Code, the Market Abuse Regulation
and the Listing Rules, and information disclosed may not be the same as that
which would have been disclosed if this announcement had been prepared in
accordance with the laws of jurisdictions outside of England.
The release, publication or distribution of this announcement in, into or from
jurisdictions other than the United Kingdom or Australia may be restricted by
law and therefore any persons who are subject to the laws of any jurisdiction
other than the United Kingdom or Australia should inform themselves about, and
observe any applicable requirements.
The availability of the Acquisition to Virgin Money Shareholders who are not
resident in and citizens of the United Kingdom or resident in Australia may be
affected by the laws of the relevant jurisdictions in which they are located
or of which they are citizen. Persons who are not resident in the United
Kingdom or Australia should inform themselves of, and observe any applicable
legal or regulatory requirements of their jurisdictions. In particular, the
ability of persons who are not resident in the United Kingdom or Australia to
vote their Virgin Money Shares or to execute and deliver CDI Voting
Instruction Forms in respect of Virgin Money CDIs (as applicable) with respect
to the Scheme at the Meetings, or to execute and deliver Forms of Proxy (or
other proxy instructions) appointing another to vote at the Meetings on their
behalf or CDI Voting Instruction Forms (or other voting instructions) issuing
voting instructions in relation to the Meetings, may be affected by the laws
of the relevant jurisdictions in which they are located. Any failure to comply
with the applicable restrictions may constitute a violation of the securities
laws of any such jurisdiction. To the fullest extent permitted by applicable
law, the companies and persons involved in the Acquisition disclaim any
responsibility or liability for the violation of such restrictions by any
person. Further details in relation to Overseas Shareholders will be contained
in the Scheme Document.
Unless otherwise determined by Nationwide or required by the Takeover Code,
and permitted by applicable law and regulation, the Acquisition will not be
made available, in whole or in part, directly or indirectly, in, into or from
a Restricted Jurisdiction where to do so would constitute a violation of the
relevant laws or regulations of such jurisdiction and no person may vote in
favour of the Acquisition by any such use, means, instrumentality or from
within a Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction. Copies of this
announcement and any formal documentation relating to the Acquisition are not
being, and must not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in or into or from any Restricted Jurisdiction and persons
receiving such documents (including custodians, nominees and trustees) must
not mail or otherwise forward, distribute or send it in or into or from any
Restricted Jurisdiction. Doing so may render invalid any related purported
vote in respect of the Acquisition. If the Acquisition is implemented by way
of a Takeover Offer (unless otherwise permitted by applicable law and
regulation), the Takeover Offer may not be made directly or indirectly, in or
into, or by the use of mails or any means or instrumentality (including, but
not limited to, facsimile, e-mail or other electronic transmission, telex or
telephone) of interstate or foreign commerce of, or of any facility of a
national, state or other securities exchange of any Restricted Jurisdiction
and the Takeover Offer may not be capable of acceptance by any such use,
means, instrumentality or facilities.
The Acquisition will be subject to English law and the jurisdiction of the
Court, and the applicable requirements of the Takeover Code, the Panel, the
FCA, the London Stock Exchange (including pursuant to the Listing Rules) and
the Registrar of Companies.
Notice to US investors in Virgin Money
The Acquisition relates to the shares of an English company and is being made
by means of a scheme of arrangement provided for under English company law. A
transaction effected by means of a scheme of arrangement is not subject to the
tender offer rules or the proxy solicitation rules under the US Exchange Act
of 1934. Accordingly, the Acquisition is subject to the disclosure
requirements and practices applicable in the United Kingdom to schemes of
arrangement which differ from the disclosure requirements of United States
tender offer and proxy solicitation rules. Neither the United States
Securities and Exchange Commission, nor any securities commission of any state
of the United States, has approved, disapproved or passed judgment on the
fairness or the merits of any offer, or passed comment upon the adequacy or
completeness of any of the information contained in this announcement. Any
representation to the contrary may be a criminal offence in the United States.
If, in the future, Nationwide exercises the right, with the consent of the
Panel (where necessary), to implement the Acquisition by way of a Takeover
Offer and determines to extend the offer into the United States, the
Acquisition will be made in compliance with applicable United States laws and
regulations, including Section 14(e) of the US Securities Exchange Act 1934
and Regulation 14E thereunder. Such a takeover would be made in the United
States by Nationwide and no one else.
Financial information included in this announcement and the Scheme Document
(or, if the Acquisition is implemented by way of a Takeover Offer, the Offer
Document) has been or will have been prepared in accordance with accounting
standards applicable in the United Kingdom that may not be comparable to
financial information of US companies or companies whose financial statements
are prepared in accordance with US GAAP. US GAAP differs in certain
significant respects from accounting standards applicable in the United
Kingdom. None of the financial information in this announcement has been
audited in accordance with auditing standards generally accepted in the United
States or the auditing standards of the Public Company Accounting Oversight
Board (United States).
The receipt of cash pursuant to the Acquisition by a Virgin Money Shareholder
in the US as consideration for the transfer of its Scheme Shares (or, in
relation to a Virgin Money CDI Holder, the Scheme Shares underlying its Virgin
Money CDIs) pursuant to the Scheme may be a taxable transaction for US federal
income tax purposes and under applicable US state and local, as well as
foreign and other, tax laws. Each Virgin Money Shareholder is therefore urged
to consult with independent legal, tax and financial advisers in connection
with making a decision regarding the Acquisition.
It may be difficult for Virgin Money Shareholders in the US to enforce their
rights and any claim arising out of the US federal laws in connection with the
Acquisition, since Nationwide and Virgin Money are located in, and organised
under the laws of, a non-US jurisdiction, and some or all of their officers
and directors may be residents of a non-US jurisdiction. Virgin Money
Shareholders in the US may not be able to sue a non-US company or its officers
or directors in a non-US court for violations of the US securities laws.
Further, it may be difficult to compel a non-US company and its affiliates to
subject themselves to a US court's jurisdiction or judgement.
In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US
Securities Exchange Act of 1934, Nationwide, certain affiliated companies and
their nominees or brokers (acting as agents), may from time to time make
certain purchases of, or arrangements to purchase, Virgin Money Shares and/or
Virgin Money CDIs outside of the US, other than pursuant to the Acquisition,
until the date on which the Acquisition and/or Scheme becomes Effective,
lapses or is otherwise withdrawn. Also, in accordance with Rule 14e-5(b) of
the US Securities Exchange Act of 1934, each of UBS GSI and J.P. Morgan
Cazenove will continue to act as an exempt principal trader in Virgin Money
Shares and Virgin Money CDIs on the London Stock Exchange and the ASX,
respectively. If such purchases or arrangements to purchase were to be made,
they would occur either in the open market at prevailing prices or in private
transactions at negotiated prices and comply with applicable law, including
the US Securities Exchange Act of 1934. Any information about such purchases
will be disclosed as required in the UK, will be reported to the Regulatory
News Service of the London Stock Exchange and will be available on the London
Stock Exchange website at www.londonstockexchange.com.
Cautionary Note Regarding Forward-Looking Statements
This announcement (including information incorporated by reference into this
announcement), statements made regarding the Acquisition, and other
information to be published by Nationwide and/or Virgin Money, contain
statements which are, or may be deemed to be, "forward-looking statements".
Forward-looking statements are prospective in nature and not based on
historical facts, but rather on current expectations and projections of the
management of Nationwide and/or Virgin Money about future events, and are
therefore subject to risks and uncertainties which could cause actual results
to differ materially from the future results expressed or implied by the
forward-looking statements.
The forward-looking statements contained in this announcement include
statements with respect to the financial condition, results of operations and
business of Virgin Money and certain plans and objectives of Nationwide with
respect thereto and other statements other than historical facts. Often, but
not always, forward-looking statements can be identified by the fact that they
do not relate only to historical or current facts and may use words such as
"anticipate", "target", "expect", "estimate", "forecast", "intend", "plan",
"budget", "scheduled" "goal", "believe", "hope", "aims", "continue", "will",
"may", "should", "would", "could", or other words of similar meaning. These
statements are based on assumptions and assessments made by Virgin Money
and/or Nationwide in light of their experience and their perception of
historical trends, current conditions, future developments and other factors
they believe appropriate. By their nature, forward-looking statements involve
known and unknown risk and uncertainty and other factors which may cause
actual results, performance or developments to differ materially from those
expressed in or implied by such, because they relate to events and depend on
circumstances that will occur in the future. Although Nationwide and/or Virgin
Money believe that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such expectations
will prove to have been correct and you are therefore cautioned not to place
undue reliance on these forward-looking statements which speak only as at the
date of this announcement. Neither Nationwide nor Virgin Money assumes any
obligation to update or correct the information contained in this announcement
(whether as a result of new information, future events or otherwise), except
as required by applicable law.
There are a number of factors which could cause actual results and
developments to differ materially from those expressed or implied in
forward-looking statements. Among the factors that could cause actual results
to differ materially from those described in the forward-looking statements
include, but are not limited to: the ability to proceed with or complete the
Acquisition; the ability to obtain requisite regulatory and shareholder
approvals and the satisfaction of other conditions on the proposed terms;
changes in the global, political, economic, business and competitive
environments and in market and regulatory forces; changes in future inflation,
deflation, exchange and interest rates; changes in tax and national insurance
rates; future business combinations, capital expenditures, acquisitions or
dispositions; changes in general and economic business conditions; changes in
the behaviour of other market participants; the anticipated benefits of the
Acquisition not being realised as a result of changes in general economic and
market conditions in the countries in which Nationwide and Virgin Money
operate; weak, volatile or illiquid capital and/or credit markets; changes in
the degree of competition in the geographic and business areas in which
Nationwide and Virgin Money operate; the repercussions of the outbreak of
epidemics (including but not limited to the COVID-19 outbreak); changes to the
Boards of Nationwide and/or Virgin Money and/ or the composition of their
respective workforces; exposures to terrorist activity, IT system failures,
cyber-crime, fraud and pension scheme liabilities; risks relating to
environmental matters such as climate change including Nationwide and/or
Virgin Money's ability along with the government and other stakeholders to
measure, manage and mitigate the impacts of climate change effectively;
changes to law and/or the policies and practices of the Bank of England, the
FCA and/or other regulatory and governmental bodies; changes in the liquidity,
capital, funding and/ or asset position and/or credit ratings of Nationwide
and/or Virgin Money; the repercussions of the UK's exit from the EU (including
any change to the UK's currency and the terms of any trade agreements (or lack
thereof) between the UK and the EU), Eurozone instability, Russia's invasion
of Ukraine, conflicts in the Middle East, any referendum on Scottish
independence, and any UK or global cost of living crisis or recession. Other
unknown or unpredictable factors could cause actual results to differ
materially from those expected, estimated or projected in the forward-looking
statements. If any one or more of these risks or uncertainties materialises or
if any one or more of the assumptions proves incorrect, actual results may
differ materially from those expected, estimated or projected. Such
forward-looking statements should therefore be construed in the light of such
factors.
Neither Nationwide nor Virgin Money, nor any of their respective associates or
directors, officers or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in any
forward-looking statements in their announcement will actually occur. Given
the risks and uncertainties, you are cautioned not to place any reliance on
these forward-looking statements.
Other than in accordance with their legal or regulatory obligations, neither
Nationwide nor Virgin Money is under any obligation, and Nationwide and Virgin
Money expressly disclaim any intention or obligation, to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
Dealing and Opening Position Disclosure Requirements
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the Offer Period and, if later, following the announcement in
which any securities exchange offeror is first identified.
An Opening Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a)
applies must be made by no later than 3.30 pm (London time) on the 10(th)
business day following the commencement of the Offer Period and, if
appropriate, by no later than 3.30 pm (London time) on the 10(th) business day
following the announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of the
offeree company or of a securities exchange offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the offeree
company or of any securities exchange offeror must make a Dealing Disclosure
if the person deals in any relevant securities of the offeree company or of
any securities exchange offeror. A Dealing Disclosure must contain details of
the dealing concerned and of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror, save to the extent
that these details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by no later
than 3.30 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the Offer Period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
Publication on website
In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement
and the documents required to be published under Rule 26 of the Takeover Code,
will be made available free of charge, subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, on Nationwide's
website at www.nationwide.co.uk/virgin-money/ and Virgin Money's website at
www.virginmoneyukplc.com/investor-relations/announcements/ by no later than 12
noon (London time) on the first business day following the date of this
announcement. For the avoidance of doubt, neither the contents of these
websites nor the contents of any websites accessible from any hyperlinks are
incorporated into or forms part of this announcement.
No profit forecasts, profit estimates or quantified benefits statements
No statement in this announcement is intended as a profit forecast, profit
estimate or quantified benefits statement for any period and no statement in
this announcement should be interpreted to mean that earnings or earnings per
share for Virgin Money for the current or future financial years would
necessarily match or exceed the historical published earnings or earnings per
share for Virgin Money.
Requesting hard copy documents
In accordance with Rule 30.3 of the Takeover Code, Virgin Money Shareholders,
persons with information rights and participants in the Virgin Money Share
Plans may request a hard copy of this announcement by contacting Virgin
Money's registrars, Computershare. Virgin Money Ordinary Shareholders can: (i)
submit a request in writing to Computershare Investor Services UK PLC, The
Pavilions, Bridgewater Road, Bristol, BS99 6ZZ, United Kingdom; or (ii) call
+44 (0)370 707 1172. Calls are charged at the standard geographical rate and
will vary by provider. Calls outside the United Kingdom will be charged at the
applicable international rate. Phone lines are open between 8.30 a.m. and 5.30
p.m. (London time), Monday to Friday (excluding public holidays in England and
Wales). Virgin Money CDI Holders can: (i) submit a request in writing to
Computershare Investor Services Pty Limited, Yarra Falls, 452 Johnston Street,
Abbotsford, VIC 3067, Australia; or (ii) call 1800 764 308 (or +61 3 9415 4142
if calling from outside of Australia). Calls are charged at the standard
geographical rate and will vary by provider. Calls outside Australia will be
charged at the applicable international rate. Phone lines are open between
8.30 a.m. and 7.00 p.m. (AEST), Monday to Friday (excluding public holidays in
Australia). Please note that Computershare cannot provide any financial, legal
or tax advice and calls may be recorded and monitored for security and
training purposes.
For persons who receive a copy of this announcement in electronic form or via
a website notification, a hard copy of this announcement will not be sent
unless so requested. Such persons may also request that all future documents,
announcements and information to be sent to them in relation to the
Acquisition should be in hard copy form.
Electronic communications
Please be aware that addresses, electronic addresses and certain other
information provided by Virgin Money Shareholders, persons with information
rights and other relevant persons for the receipt of communications from
Virgin Money may be provided to Nationwide during the Offer Period as required
under Section 4 of Appendix 4 to the Takeover Code.
Rounding
Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of figures that precede them.
General
Nationwide reserves the right to elect, with the consent of the Panel (where
necessary), and subject to the terms and conditions of the Co-operation
Agreement, to implement the Acquisition by way of a Takeover Offer for the
entire issued and to be issued share capital of Virgin Money not already held
by Nationwide as an alternative to the Scheme. In such an event, a Takeover
Offer will be implemented on substantially the same terms, so far as
applicable, as those which would apply to the Scheme.
If the Acquisition is effected by way of Takeover Offer, and such Takeover
Offer becomes or is declared unconditional in all respects and sufficient
acceptances are received, Nationwide intends to exercise its rights to apply
the provisions of Chapter 3 of Part 28 of the Companies Act so as to acquire
compulsorily the remaining Virgin Money Shares in respect of which the
Takeover Offer has not been accepted.
If you are in any doubt about the contents of this announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor or
independent financial adviser duly authorised under FSMA if you are resident
in the United Kingdom or, if not, from another appropriately authorised
independent financial adviser.
APPENDIX 1
CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE ACQUISITION
PART A: CONDITIONS TO THE SCHEME AND THE ACQUISITION
Long Stop Date
1. The Acquisition will be conditional upon the Scheme becoming unconditional and becoming Effective, subject to the provisions of the Takeover Code, by no later than 11.59 p.m. on the Long Stop Date.
Scheme approval condition
2. The Scheme will be conditional upon:
(A) (i) its approval by a majority in number representing not less than 75 per cent. in value of the Scheme Shareholders who are on the register of members of Virgin Money (or the relevant class or classes thereof, if applicable) at the Voting Record Time, present and voting (and entitled to vote), whether in person or by proxy, at the Court Meeting and at any separate class meeting which may be required by the Court or at any adjournment of any such meeting; and (ii) such Court Meeting and any such separate class meeting or any adjournment of any such meeting being held on or before the 22(nd) day after the expected date of the Court Meeting to be set out in the Scheme Document in due course (or such later date, if any, (a) as Nationwide and Virgin Money may agree, or (b) (in a competitive situation) as may be specified by Nationwide with the consent of the Panel, and in each case that (if so required) the Court may allow);
(B) (i) the Acquisition Resolution(s) being duly passed by the requisite majority or majorities at the General Meeting or at any adjournment of that meeting; and (ii) such General Meeting or any adjournment of such meeting being held on or before the 22(nd) day after the expected date of the General Meeting to be set out in the Scheme Document in due course (or such later date, if any, (a) as Nationwide and Virgin Money may agree, or (b) (in a competitive situation) as may be specified by Nationwide with the consent of the Panel, and in each case that (if so required) the Court may allow); and
(C) (i) the sanction of the Scheme by the Court with or without modification (but subject to any such modification being acceptable to Nationwide and Virgin Money) and the delivery of the Court Order to the Registrar of Companies; and (ii) the Court Hearing being held on or before the 22(nd) day after the expected date of the Court Hearing to be set out in the Scheme Document in due course (or such later date, if any, (a) as Nationwide and Virgin Money may agree, or (b) (in a competitive situation) as may be specified by Nationwide with the consent of the Panel, and in each case that (if so required) the Court may allow).
Virgin Resolution
3. The Acquisition will be conditional upon:
(A) the Virgin Resolution being duly passed by the requisite majority of Independent Virgin Money Shareholders at the General Meeting or at any adjournment of that meeting for the purposes of Note 2 on Rule 16.1 of the Takeover Code; and
(B) the TMLA not being terminated and notice not being served to terminate the TMLA.
General conditions
4. In addition, Nationwide and Virgin Money have agreed that the Acquisition will be conditional upon the following Conditions and, accordingly, the necessary actions to make the Scheme Effective will not be taken unless the following Conditions (as amended if appropriate) have been satisfied, or, where relevant, waived:
Regulatory
(A) in respect of Nationwide and each other person (if any) required to give a notice under section 178(1) FSMA in connection with the Acquisition, the appropriate regulator (as defined in section 178(2A) FSMA) of each UK authorised person (as defined in section 191G FSMA) with respect to whom the Acquisition contemplates an acquisition of or increase in control (within the meaning of Part XII FSMA):
(i) having given notice for the purposes of section 189(4)(a) or section 189(7) FSMA that it has determined to approve such acquisition of or increase in control on terms (if any) that are reasonably satisfactory to Nationwide; or
(ii) being treated, by virtue of section 189(6) FSMA, as having approved such acquisition of or increase in control,
where references to FSMA are read, where applicable, with the Financial Services and Markets Act 2000 (Controllers) (Exemption) Order 2009 (as amended from time to time);
Competition
(B) either:
(i) on terms reasonably satisfactory to Nationwide:
(a) the CMA confirming that the Acquisition or any matter arising therefrom or related thereto or any part of it will not be subject to a Phase 2 reference under section 33 of the Enterprise Act 2002 or on any other statutory basis (a "Phase 2 CMA Reference"), or the applicable time period for the CMA to make a Phase 2 CMA Reference having expired without the CMA having made such a Phase 2 CMA Reference; and
(b) if the relevant Secretary of State (the "SoS") has made a public interest intervention in respect of the Acquisition or any matter arising therefrom or related thereto or any part of it under Chapter 2 of the Enterprise Act 2002 or on any other statutory basis, the SoS confirming that: (a) the Acquisition can proceed; and (b) the Acquisition or any matter arising therefrom or related thereto or any part of it will not be subject to a reference to the chair of the CMA under section 45 of the Enterprise Act 2002 or on any other statutory basis (a "Phase 2 SoS Reference"); or
(ii) in the event that there is a Phase 2 CMA Reference or a Phase 2 SoS Reference and the Condition set out in paragraph 4(B)(i) above is waived or not invoked by Nationwide: (i) confirmation from the CMA and/or (if applicable) the SoS that the Acquisition and any matter arising therefrom and related thereto, and all parts of it, may proceed on terms reasonably satisfactory to Nationwide; and (ii) to the extent relevant, all conditions or obligations to which such confirmation(s) is or are (as applicable) subject and which are required to be satisfied and/or complied with prior to Completion of the Acquisition having been satisfied or complied with;
General Third Party clearances
(C) other than in respect of or in connection with the Conditions set out in paragraphs 4(A) and 4(B) above, the waiver (or non-exercise within any applicable time limits) by any relevant government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body, court, trade agency, association, institution, any entity owned or controlled by any relevant government or state, or any other body or person whatsoever in any jurisdiction (each a "Third Party") of any termination right, right of pre-emption, first refusal or similar right (which is material in the context of the Wider Virgin Money Group taken as a whole or in the context of the Acquisition) arising as a result of or in connection with the Scheme or the Acquisition;
(D) other than in respect of or in connection with the Conditions set out in paragraphs 4(A) and 4(B) above, all notifications, filings or applications which are necessary having been made in connection with the Acquisition and all statutory or regulatory obligations in any jurisdiction having been complied with in connection with the Acquisition or the acquisition by any member of the Wider Nationwide Group of any shares or other securities in, or control of, Virgin Money and all authorisations, orders, recognitions, grants, determinations, confirmations, consents, licences, clearances, permissions, exemptions and approvals deemed necessary or appropriate by Nationwide or any member of the Wider Nationwide Group (in each such case, acting reasonably) for or in respect of the Acquisition including without limitation, its implementation and financing or the proposed direct or indirect acquisition of any shares or other securities in, or control of, Virgin Money or any member of the Wider Virgin Money Group by any member of the Wider Nationwide Group having been obtained in terms and in a form reasonably satisfactory to Nationwide from all appropriate Third Parties or persons with whom any member of the Wider Virgin Money Group has entered into contractual arrangements and all such authorisations, orders, grants, recognitions, determinations, confirmations, consents, licences, clearances, permissions, exemptions and approvals reasonably considered necessary or appropriate to carry on the business of any member of the Wider Virgin Money Group which are material in the context of the Wider Nationwide Group or the Wider Virgin Money Group as a whole or for or in respect of the Acquisition including, without limitation, its implementation or financing remaining in full force and effect and all filings necessary for such purpose having been made and there being no notice or intimation of any intention to revoke or not to renew any of the same at the time at which the Acquisition becomes otherwise unconditional and all necessary statutory or regulatory obligations in any jurisdiction having been complied with;
(E) other than in respect of or in connection with the Conditions set out in paragraphs 4(A) and 4(B) above, no Third Party having given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference (and, in each case, not having withdrawn the same), or having required any action to be taken, or otherwise having done anything, or having enacted, made or proposed any statute, regulation, decision or order or change to published practice, and there not continuing to be outstanding any statute, regulation, decision or order or having taken any other action or step which would or might reasonably be expected to:
(i) require, prevent or delay the divestiture, or materially alter the terms envisaged for any proposed divestiture by any member of the Wider Nationwide Group or any member of the Wider Virgin Money Group of all or any portion of their respective businesses, assets or property or impose any limitation on the ability of any of them to conduct their respective businesses (or any of them) or to own any of their respective assets or properties or any part thereof which, in any such case, is material in the context of the Wider Nationwide Group or the Wider Virgin Money Group in either case taken as a whole or in the context of the Acquisition;
(ii) require, prevent or delay the divestiture by any member of the Wider Nationwide Group of any shares or other securities in Virgin Money;
(iii) impose any material limitation on, or result in a delay in, the ability of any member of the Wider Nationwide Group directly or indirectly to acquire or to hold or to exercise effectively any rights of ownership in respect of shares or loans or securities convertible into shares or any other securities (or the equivalent) in any member of the Wider Virgin Money Group or the Wider Nationwide Group or to exercise voting or management control over any such member;
(iv) otherwise adversely affect the business, assets, profits or prospects of any member of the Wider Nationwide Group or of any member of the Wider Virgin Money Group to an extent which is material in the context of the Wider Nationwide Group or the Wider Virgin Money Group in either case taken as a whole or in the context of the Acquisition;
(v) make the Scheme or Acquisition or, in each case, its implementation or the acquisition or proposed acquisition by Nationwide or any member of the Wider Nationwide Group of any shares or other securities in, or control of Virgin Money void, illegal, and/or unenforceable under the laws of any jurisdiction, or otherwise, directly or indirectly, restrain, restrict, prohibit, delay, challenge or otherwise interfere with the same, or impose additional conditions or obligations with respect thereto;
(vi) require any member of the Wider Nationwide Group or the Wider Virgin Money Group to offer to acquire any shares or other securities (or the equivalent) or interest in any member of the Wider Virgin Money Group or the Wider Nationwide Group owned by any third party;
(vii) impose any limitation on the ability of any member of the Wider Virgin Money Group to co-ordinate its business, or any part of it, with the businesses of any other members which is adverse to and material in the context of the Wider Virgin Money Group taken as a whole or in the context of the Acquisition; or
(viii) result in any member of the Wider Virgin Money Group ceasing to be able to carry on business under any name under which it presently does so,
and all applicable waiting and other time periods (including any extensions thereof) during which any such Third Party could institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or any other step under the laws of any jurisdiction in respect of the Scheme or the Acquisition, or the acquisition or proposed acquisition of any Virgin Money Shares having expired, lapsed or been terminated;
Certain matters arising as a result of any arrangement, agreement etc.
(F) save as Disclosed, there being no provision of any agreement, arrangement, licence, permit or other instrument to which any member of the Wider Virgin Money Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, or any circumstance which in consequence of the Acquisition, or the acquisition or proposed acquisition of any shares or other securities (or equivalent) in Virgin Money or because of a change in the control or management of Virgin Money or otherwise, could or might reasonably be expected to result in any of the following (to an extent which is material and adverse in the context of the Wider Virgin Money Group or the Wider Nationwide Group, in either case, taken as a whole or in the context of the Acquisition):
(i) any moneys borrowed by or any other indebtedness or liabilities (actual or contingent) of, or grant available to any such member, being or becoming repayable or capable of being declared repayable immediately or earlier than their or its stated maturity date or repayment date or the ability of any such member to borrow moneys or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;
(ii) any such agreement, arrangement, licence, permit or instrument or the rights, liabilities, obligations or interests of any such member thereunder being terminated or adversely modified or affected or any obligation or liability arising or any action being taken or arising thereunder;
(iii) any asset or interest of any such member being or failing to be disposed of or charged or ceasing to be available to any such member or any right arising under which any such asset or interest could be required to be disposed of or charged or could cease to be available to any such member otherwise than in the ordinary course of business;
(iv) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interest of any such member;
(v) the rights, liabilities, obligations or interests of any such member, or the business of any such member with, any person, firm, company or body (or any arrangement or arrangements relating to any such interest or business) being terminated, adversely modified or affected;
(vi) the value of any such member or its financial or trading position or prospects being prejudiced or adversely affected;
(vii) any such member ceasing to be able to carry on business under any name under which it presently does so; or
(viii) the creation or acceleration of any liability, actual or contingent, by any such member (including any material tax liability or any obligation to obtain or acquire any material authorisation, order, grant, recognition, determination, confirmation, consent, licence, clearance, permission, exemption, approval, notice, waiver, concession, agreement or exemption from any Third Party or any person) other than trade creditors or other liabilities incurred in the ordinary course of business or in connection with the Acquisition,
and no event having occurred which, under any provision of any agreement, arrangement, licence, permit or other instrument to which any member of the Wider Virgin Money Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, would or might reasonably be expected to result in any of the events or circumstances as are referred to in sub-paragraphs (i) to (viii) (inclusive) of this paragraph 4(F), in each case to the extent material in the context of the Wider Virgin Money Group taken as a whole or in the context of the Acquisition;
Certain events occurring since 30 September 2023
(G) save as Disclosed, no member of the Wider Virgin Money Group, since 30 September 2023 having:
(i) save as between Virgin Money and wholly-owned subsidiaries of Virgin Money or for Virgin Money Shares issued under or pursuant to the exercise of options and vesting of awards granted under the Virgin Money Share Plans, issued, or agreed to issue, authorised or proposed the issue of additional shares of any class;
(ii) save as between Virgin Money and wholly-owned subsidiaries of Virgin Money or for the grant of options and awards and other rights granted under the Virgin Money Share Plans or pursuant to existing trading arrangements in relation to Virgin Money CDIs, issued or agreed to issue, authorised or proposed the issue of securities convertible into shares of any class or rights, warrants or options to subscribe for, or acquire, any such shares or convertible securities;
(iii) other than to another member of the Virgin Money Group, prior to the Acquisition becoming Effective, recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus issue, dividend or other distribution whether payable in cash or otherwise;
(iv) save for intra-Virgin Money Group transactions, merged or demerged with any body corporate or acquired or disposed of or transferred, mortgaged or charged or created any security interest over any assets or any right, title or interest in any asset (including shares and trade investments) or authorised or proposed or announced any intention to propose any merger, demerger, acquisition or disposal, transfer, mortgage, charge or security interest, in each case, other than in the ordinary course of business and, in each case, to the extent material in the context of the Wider Virgin Money Group taken as a whole or in the context of the Acquisition;
(v) save for intra-Virgin Money Group transactions or in the ordinary course of business, made or authorised or proposed or announced an intention to propose any change in its loan capital in each case, to the extent material in the context of the Wider Virgin Money Group taken as a whole or in the context of the Acquisition;
(vi) save for intra-Virgin Money Group transactions or in the ordinary course of business, issued, authorised or proposed the issue of, or made any changes in or to, any debentures or incurred or increased any indebtedness or become subject to any contingent liability;
(vii) save for the Buyback Programme and save as between Virgin Money and wholly-owned subsidiaries of Virgin Money, purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, save in respect to the matters mentioned in sub-paragraphs (i) or (ii) of paragraph 4(G) above or pursuant to the Buyback Programme, made any other change to any part of its share capital in each case, to the extent material in the context of the Wider Virgin Money Group taken as a whole;
(viii) save for intra-Virgin Money Group transactions, implemented, or authorised, proposed or announced its intention to implement, any reconstruction, merger, demerger, amalgamation, scheme, commitment or other transaction or arrangement otherwise than in the ordinary course of business;
(ix) entered into or varied or authorised, proposed or announced its intention to enter into or vary any contract, transaction, arrangement or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, onerous or unusual nature or magnitude or which involves or could involve an obligation of such nature or magnitude (save in the ordinary course of business) and is material in the context of the Wider Virgin Money Group taken as a whole or in the context of the Acquisition;
(x) (other than in respect of a member which is dormant and was solvent at the relevant time) taken any corporate action or steps or had any legal proceedings started or threatened against it in relation to the suspension of payments, a moratorium of any indebtedness, or petition presented or order made for its winding-up, dissolution or reorganisation or for the appointment of a receiver, administrative receiver, administrator, manager, trustee or similar officer of all or any part of its assets or revenues or any analogous proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed in each case to the extent material in the context of the Wider Virgin Money Group taken as a whole or in the context of the Acquisition;
(xi) waived or compromised any claim otherwise than in the ordinary course of business which is material in the context of the Wider Virgin Money Group taken as a whole or in the context of the Acquisition;
(xii) made any material alteration to its memorandum or Articles or other incorporation documents;
(xiii) been unable, or admitted in writing that it is unable, to pay its debts or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business, in each case, to the extent that is material to the Wider Virgin Money Group taken as a whole or in the context of the Acquisition;
(xiv) entered into any contract, commitment, arrangement or agreement otherwise than in the ordinary course of business or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced any intention to, or proposed to, effect any of the transactions, matters or events referred to in this paragraph 4(G);
(xv) made or agreed or consented to any change to:
(a) the terms of the trust deeds constituting the pension scheme(s) established by any member of the Wider Virgin Money Group for its directors, employees or their dependents;
(b) the contributions payable to any such scheme(s) or to the benefits which accrue or to the pensions which are payable thereunder;
(c) the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined; or
(d) the basis upon which the liabilities (including pensions) of such pension schemes are funded, valued or made,
in each case, to the extent material in the context of the Wider Virgin Money Group taken as a whole or in the context of the Acquisition;
(xvi) save as agreed by the Panel (if required) and Nationwide, proposed, agreed to provide or modified the terms of any of the Virgin Money Share Plans or other benefit constituting a material change relating to the employment or termination of employment of a material category of persons employed by the Wider Virgin Money Group or which constitutes a material change to the terms or conditions of employment of any senior employee of the Wider Virgin Money Group;
(xvii) taken (or agreed or proposed to take) any action which requires, or would require, the consent of the Panel or the approval of Virgin Money Shareholders in general meeting in accordance with, or as contemplated by, Rule 21.1 of the Takeover Code;
(xviii) save as agreed by the Panel (if required) and Nationwide, entered into or varied in a material way (or offered to enter into or vary in a material way) the terms of, any contracts, agreement or arrangement with any of the directors or senior executives of any members of the Wider Virgin Money Group;
(xix) waived or compromised any claim which is material in the context of the Wider Virgin Money Group taken as a whole or in the context of the Acquisition, otherwise than in the ordinary course; or
(xx) been subject to the exercise of any stabilisation power or mandatory reduction instrument under the Banking Act 2009;
No adverse change, litigation or regulatory enquiry
(H) save as Disclosed, since 30 September 2023:
(i) no adverse change or deterioration having occurred in the business, assets, financial or trading position or profits, operational performance or prospects of any member of the Wider Virgin Money Group which, in any such case, is material in the context of the Wider Virgin Money Group taken as a whole or in the context of the Acquisition and no circumstances have arisen which would or might reasonably be expected to result in such adverse change or deterioration;
(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider Virgin Money Group is or may become a party (whether as a plaintiff, defendant or otherwise) and no enquiry, review or investigation by, or complaint or reference to, any Third Party or other investigative body against or in respect of any member of the Wider Virgin Money Group having been instituted announced, implemented or threatened by or against or remaining outstanding in respect of any member of the Wider Virgin Money Group which in any such case has or might reasonably be expected to adversely affect any member of the Wider Virgin Money Group in a way that is material to the Wider Virgin Money Group taken as a whole or in the context of the Acquisition;
(iii) no contingent or other liability of any member of the Wider Virgin Money Group having arisen or become apparent to Nationwide or increased which has or might reasonably be expected to adversely affect any member of the Wider Virgin Money Group in a way that is material to the Wider Virgin Money Group taken as a whole or in the context of the Acquisition;
(iv) no enquiry or investigation by, or complaint or reference to, any Third Party having been threatened, announced, implemented, instituted by or remaining outstanding against or in respect of any member by or the Wider Virgin Money Group which in any case is material in the context of the Wider Virgin Money Group taken as a whole or in the context of the Acquisition;
(v) no member of the Wider Virgin Money Group having conducted its business in breach of any applicable laws and regulations which is material in the context of the Wider Virgin Money Group taken as a whole or in the context of the Acquisition;
(vi) no steps having been taken which are likely to result in the withdrawal, cancellation, termination or modification of any licence or permit held by any member of the Wider Virgin Money Group which is necessary for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which has had, or would reasonably be expected to have, an adverse effect which is material in the context of the Wider Virgin Money Group taken as a whole or in the context of the Acquisition;
No discovery of certain matters
(I) save as Disclosed, Nationwide not having discovered:
(i) that any financial, business or other information concerning the Wider Virgin Money Group as contained in the information publicly disclosed at any time by or on behalf of any member of the Wider Virgin Money Group is materially misleading, contains a material misrepresentation of fact or omits to state a fact necessary to make that information not misleading, and which was not subsequently corrected before the date of this announcement by disclosure either publicly or otherwise to Nationwide or its professional advisers, in each case, to the extent material in the context of the Wider Virgin Money Group taken as a whole or in the context of the Acquisition;
(ii) that any member of the Wider Virgin Money Group or partnership, company or other entity in which any member of the Wider Virgin Money Group has a significant economic interest and which is not a subsidiary undertaking of Virgin Money is subject to any liability (contingent or otherwise), other than in the ordinary course of business and in each case, to the extent material in the context of the Wider Virgin Money Group taken as a whole or in the context of the Acquisition; or
(iii) any information which affects the import of any information Disclosed at any time by or on behalf of any member of the Wider Virgin Money Group and which is material in the context of the Wider Virgin Money Group taken as a whole or in the context of the Acquisition;
Anti-corruption, economic sanctions, criminal property and money laundering
(J) save as Disclosed, Nationwide not having discovered that:
(i) any:
(a) past or present member, director, officer or employee of the Wider Virgin Money Group, in connection with their position in the Wider Virgin Money Group, is or has at any time engaged in any activity, practice or conduct which would constitute an offence under the Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other applicable anti-corruption or anti-bribery law, rule or regulation or any other applicable law, rule, or regulation concerning improper payments or kickbacks; or
(b) person that performs or has performed services for or on behalf of the Wider Virgin Money Group is or has at any time engaged in any activity, practice or conduct in connection with the performance of such services which would constitute an offence under the Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other applicable anti-corruption or anti-bribery law, rule or regulation or any other applicable law, rule, or regulation concerning improper payments or kickbacks; or
(ii) any asset of any member of the Wider Virgin Money Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition) or proceeds of crime under any other applicable law, rule, or regulation concerning money laundering or proceeds of crime or any member of the Wider Virgin Money Group is found to have engaged in activities constituting money laundering under any applicable law, rule, or regulation concerning money laundering;
(iii) any past or present member, director, officer or employee of the Wider Virgin Money Group, or any other person for whom any such person may be liable or responsible, is or has engaged in any conduct which would violate applicable economic sanctions or dealt with, made any investments in, made any funds or assets available to or received any funds or assets from:
(a) any government, entity or individual in respect of which US, UK or EU persons, or persons operating in those territories, are prohibited from engaging in activities or doing business, or from receiving or making available funds or economic resources, by US, UK or EU laws or regulations, including the economic sanctions administered by the United States Office of Foreign Assets Control, or HM Revenue and Customs; or
(b) any government, entity or individual targeted by any of the economic sanctions of the United Nations, the US, the United Kingdom, the EU or any of their respective member states, save that this shall not apply if and to the extent that it is or would be unenforceable by reason of breach of any applicable Blocking Law;
(iv) any past or present member, director, officer or employee of the Wider Virgin Money Group, or any other person for whom any such person may be liable or responsible:
(a) has engaged in conduct which would violate any relevant anti-terrorism laws, rules, or regulations, including but not limited to the U.S. Anti-Terrorism Act;
(b) has engaged in conduct which would violate any relevant anti-boycott law, rule, or regulation or any applicable export controls, including but not limited to the Export Administration Regulations administered and enforced by the U.S. Department of Commerce or the International Traffic in Arms Regulations administered and enforced by the U.S. Department of State;
(c) has engaged in conduct which would violate any relevant laws, rules, or regulations concerning human rights, including but not limited to any law, rule, or regulation concerning false imprisonment, torture or other cruel and unusual punishment, or child labour; or
(d) is debarred or otherwise rendered ineligible to bid for or to perform contracts for or with any government, governmental instrumentality, or international organization or found to have violated any applicable law, rule, or regulation concerning government contracting or public procurement; or
(v) any member of the Wider Virgin Money Group is or has been engaged in any transaction which would cause Nationwide or any member of the Wider Nationwide Group to be in breach of any law or regulation upon its offer of Virgin Money, including but not limited to the economic sanctions of the United States Office of Foreign Assets Control, or HM Revenue and Customs, or any other relevant government authority.
For the purposes of these Conditions the "Wider Virgin Money Group" means
Virgin Money and its subsidiary undertakings, associated undertakings and any
other undertaking in which Virgin Money and/or such undertakings (aggregating
their interests) have a significant interest and the "Wider Nationwide Group"
means Nationwide and its subsidiary undertakings, associated undertakings and
any other undertaking in which Nationwide and/or such undertakings
(aggregating their interests) have a significant interest and for these
purposes "subsidiary undertaking" and "undertaking" have the meanings given by
the Companies Act, "associated undertaking" has the meaning given by paragraph
19 of Schedule 6 to the Large and Medium-sized Companies and Groups (Accounts
and Reports) Regulations 2008, other than paragraph 19(1)(b) of Schedule 6 to
those regulations which shall be excluded for this purpose, and "significant
interest" means a direct or indirect interest in 20 per cent. or more of the
total voting rights conferred by the equity share capital (as defined in
section 548 of the Companies Act).
PART B: FURTHER TERMS OF THE ACQUISITION
1. Subject to the requirements of the Panel and the Takeover Code, Nationwide reserves the right in its sole discretion to waive:
(A) the deadline set out in paragraph 1 of Part A of this Appendix 1, and any of the deadlines set out in paragraph 2 of Part A of this Appendix 1 for the timing of the Court Meeting, the General Meeting and the Court Hearing. If any such deadline is not met, Nationwide shall make an announcement by 8.00 a.m. on the Business Day following such deadline confirming whether it has invoked or waived the relevant Condition or agreed with Virgin Money (or, as the case may be, the Panel) to extend the deadline in relation to the relevant Condition; and
(B) in whole or in part, all or any of the Conditions set out in paragraphs 3(B) and 4(A) to 4(J) (inclusive) of Part A of this Appendix 1. For the avoidance of doubt, Nationwide may not waive the Conditions set out in paragraphs 2(A)(i), 2(B)(i), 2(C)(i) and 3(A) of Part A of this Appendix 1.
2. Conditions 2(A) and 2(B) and Conditions 3 and 4 (inclusive) must each be satisfied or (if capable of wavier) be waived by Nationwide by no later than 11.59 p.m. on the date immediately preceding the date of the Court Hearing. Nationwide shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as satisfied any of Conditions set out in paragraphs 3(B) and 4(A) to 4(J) (inclusive) of Part A of this Appendix 1 that it is entitled (with the consent of the Panel and subject to the requirements of the Takeover Code) to invoke, by a date earlier than the latest date specified above for the fulfilment or waiver thereof, notwithstanding that the other Condition may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any such Conditions may not be capable of fulfilment.
3. Under Rule 13.5(a) of the Takeover Code, Nationwide may not invoke a Condition so as to cause the Acquisition not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the Condition are of material significance to Nationwide in the context of the Acquisition. Conditions 1, 2(A), 2(B), 2(C) and 3(A) of Part A of this Appendix 1, and if applicable, any acceptance condition if the Acquisition is implemented by means of a Takeover Offer, are not subject to Rule 13.5(a) of the Takeover Code. Nationwide may only invoke a Condition that is subject to Rule 13.5(a) with the consent of the Panel and any Condition that is subject to Rule 13.5(a) may be waived by Nationwide.
4. If Nationwide is required by the Panel to make an offer for Virgin Money Shares under the provisions of Rule 9 of the Takeover Code, Nationwide may make such alterations to any of the above Conditions and the terms of the Acquisition as are necessary to comply with the provisions of Rule 9.
5. Nationwide reserves the right to elect to implement the Acquisition by way of a Takeover Offer as an alternative to the Scheme (subject to the Panel's consent (where necessary) and the terms of the Co-operation Agreement). In such an event, the Acquisition will be implemented on the same terms and conditions (subject to appropriate amendments including (without limitation) the inclusion of an acceptance condition set at 90 per cent. of the Virgin Money Shares to which such Takeover Offer relates (or such lesser percentage as Nationwide and Virgin Money may, subject to the rules of the Takeover Code and the terms of the Co-operation Agreement and with the consent of the Panel, decide, being in any case more than 50 per cent. of the Virgin Money Shares), or any amendments required by, or deemed appropriate by, Nationwide under applicable law or any amendments necessary to reflect the Takeover Offer) as those that would apply to the Scheme. Further, if sufficient acceptances of such Takeover Offer are received and/or sufficient Virgin Money Shares are otherwise acquired, it is the intention of Nationwide to apply the provisions of the Companies Act to acquire compulsorily any outstanding Virgin Money Shares to which such Takeover Offer relates.
6. Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.
7. Virgin Money Shares which will be acquired pursuant to the Acquisition will be acquired fully paid and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature whatsoever and together with all rights now or hereafter attaching or accruing to them, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid or any other return of capital or value (whether by reduction of share capital or share premium account or otherwise) by reference to a record date after the Effective Date.
8. If, on or after the date of this announcement and before the Effective
Date, other than the FY2024 Dividend and any repurchases of Virgin Money
Shares by Virgin Money pursuant to the Buyback Programme, any dividend,
distribution or other return of capital or value is announced, declared, made
or paid by Virgin Money or becomes payable by Virgin Money in respect of the
Virgin Money Shares, Nationwide reserves the right (without prejudice to any
right of Nationwide, with the consent of the Panel, to invoke the Condition
set out in paragraph 4(G)(iii) of Part A to this Appendix 1) to reduce the
Consideration that would be payable under the terms of the Acquisition for the
Virgin Money Shares by an amount up to the amount of such dividend and/or
distribution and/or other return of capital or value. In such circumstances,
Virgin Money Shareholders would be entitled to receive and retain any such
dividend and/or other distribution and/or return of capital or value to which
they are entitled. Any exercise by Nationwide of its rights referred to in
this paragraph 8 shall be the subject of an announcement and, for the
avoidance of doubt, shall not be regarded as constituting any revision or
variation of the Acquisition.
9. The Acquisition will be governed by the laws of England and Wales and be subject to the jurisdiction of the English Courts and to the Conditions and certain further terms which are set out in this Appendix 1 and to the full terms which will be set out in the Scheme Document. The Scheme will be subject to the applicable requirements of the Takeover Code, the Panel, the FCA, the London Stock Exchange (including pursuant to the Listing Rules) and the Registrar of Companies.
10. The Acquisition will not be made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex, telephone, internet or e-mail) of interstate or foreign commerce of, or of any facility of, any Restricted Jurisdiction.
11. The availability of the Acquisition to persons not resident in the United Kingdom or Australia may be affected by the laws of the relevant jurisdictions. Any persons who are subject to the laws of any jurisdiction other than the United Kingdom or Australia should inform themselves about and observe any applicable requirements.
APPENDIX 2
BASES AND SOURCES
In this announcement, unless otherwise stated or the context otherwise
requires, the following bases and sources have been used.
1. Virgin Money's fully diluted equity value has been
calculated on the basis of a fully diluted issued ordinary share capital of
1,321,821,274 Virgin Money Shares, calculated as:
· 1,296,012,374 Virgin Money Shares in issue as at 20 March 2024
(being the Latest Practicable Date before this announcement); plus
· 29,376,322 Virgin Money Shares which may be issued on or after the
date of this announcement pursuant to Virgin Money Share Plans; less
· 3,567,422 Virgin Money Shares as at the Latest Practicable Date,
held by the employee benefit trusts operated by the Virgin Money Group that
can be used to satisfy the exercise of options and vesting of awards granted
under the Virgin Money Share Plans.
2. References to proportions of Virgin Money's share capital in this
announcement are with respect to the issued ordinary share capital as at the
close of business on the Last Practicable Date.
3. The premium calculations to the price per Virgin Money Share used
in this announcement have been calculated based on the total value of 220
pence per Virgin Money Share, and by reference to:
· the Closing Price on 6 March 2024 (being the last Business Day
before the commencement of the Offer Period) of 159.1 pence per Virgin Money
Share; and
· the three-month volume weighted average Closing Price of 157.5
pence per Virgin Money Share as at 6 March 2024.
4. A value of approximately £2.9 billion for the entire
issued and to be issued share capital of Virgin Money is based on:
· the total value of 220 pence per Virgin Money Share; and
· Virgin Money's fully diluted issued ordinary share capital of
1,321,821,274 Virgin Money Shares, as set out in paragraph 1 above.
5. Unless otherwise stated, the Closing Price of Virgin Money Shares
has been sourced from the London Stock Exchange Daily Official List and the
volumed weighted average Closing Price of Virgin Money Shares has been derived
from Bloomberg.
6. Unless otherwise stated, balance sheet financial
information relating to the Virgin Money Group has been extracted (without
material adjustment) from the annual report and audited accounts of the Virgin
Money Group for the 12 months ended 30 September 2023 and balance sheet
financial information relating to Nationwide has been extracted (without
material adjustment) from the unaudited consolidated financial statements of
Nationwide for the 6 months ended 30 September 2023.
7. In paragraph 6 of this announcement, the implied multiple
of 0.7x Virgin Money's tangible book value as at 31 December 2023 is based on:
· the total value of 220 pence per Virgin Money Share under the
Acquisition; and
· tangible net asset value ("TNAV") per Virgin Money Share of 337
pence as at 31 December 2023 (as set out in Virgin Money's Q1 FY2024 trading
update on 6 February 2024).
8. In paragraph 6 of this announcement, the median multiple of
0.5x Virgin Money's tangible book value over the period from 15 October 2018
to 6 March 2024 is calculated as the median multiple over this period based
on:
· daily Closing Price per Virgin Money Share during this period,
derived from FactSet; and
· for each Business Day, the most recently reported TNAV per Virgin
Money share as reported by Virgin Money in its quarterly, interim and annual
financial results over the period.
9. The information regarding the estimated pro-forma capital,
liquidity and leverage position of the Combined Group, as set out in paragraph
13 of this announcement, represents unaudited estimates prepared by Nationwide
using relevant information relating to Nationwide and Virgin Money as at 30
September 2023, adjusted to reflect relevant estimated Acquisition-related
costs, including the payment of the exit fee to Virgin Enterprises in respect
of the termination of the TMLA and Nationwide management's unaudited estimates
of the position as at 30 September 2024, and Acquisition-related adjustments,
including expected fair value and credit adjustments. These estimates have
been prepared for illustrative purposes only and, by their nature, they do not
necessarily represent the actual positions which will exist following
Completion.
10. Certain figures included in this announcement have been
subject to rounding adjustments.
APPENDIX 3
DETAILS OF IRREVOCABLE UNDERTAKINGS
From Virgin Money Directors as shareholders
The following Virgin Money Directors have each given an irrevocable
undertaking to vote (or procure the voting, as applicable) in favour of the
Scheme at the Court Meeting and the Resolutions at the General Meeting (save
for Sara Weller whose irrevocable undertaking excludes the Virgin Resolution),
or to accept, or procure the acceptance of, the Takeover Offer (if the
Acquisition is implemented as a Takeover Offer), in respect of their
beneficial holdings of Virgin Money Shares:
Name Number of Virgin Money Shares in respect of which undertaking is given Percentage of Virgin Money's issued share capital
Clifford Abrahams 254,176 0.02%
David Bennett 40,388 0.00%
David Duffy 1,585,518 0.12%
Geeta Gopalan 7,932 0.00%
Darren Pope 11,785 0.00%
Tim Wade 20,505 0.00%
Sara Weller 25,000 0.00%
Total 1,945,304 0.15%
The irrevocable undertakings given by Virgin Money Directors will cease to be
binding, inter alia:
· if the Scheme Document or Offer Document (as the case may be) has
not been posted within 28 days of the issue of the announcement (or within
such longer period as Nationwide and Virgin Money, with the consent of the
Panel determines), provided that if the Acquisition was initially being
implemented by way of a Scheme, and Nationwide elects to exercise its right to
implement the Acquisition by way of a Takeover Offer or vice versa, such time
period shall be extended to refer to within 28 days of the issue of the press
announcement announcing the change in structure (or such other date for the
posting of the Offer Document or Scheme Document (as applicable) as the Panel
may require);
· on the date on which the Acquisition (whether implemented by way of
a Scheme or a Takeover Offer) is withdrawn or lapses in accordance with its
terms, provided that this shall not apply where the Acquisition is withdrawn
or lapses as a result of Nationwide exercising its right, in accordance with
the Takeover Code, to implement the Acquisition by way of a Takeover Offer
rather than by way of a Scheme or vice versa;
· if Nationwide announces that it does not intend to proceed with the
Acquisition and no new, revised or replacement Scheme or Takeover Offer is
announced by Nationwide in accordance with Rule 2.7 of the Takeover Code at
the same time;
· any third party offer for the Virgin Money Shares is declared
unconditional or, if implemented by way of a scheme of arrangement, becomes
effective; or
· the Acquisition has not become effective in accordance with its
terms, or been declared unconditional, by the Long Stop Date.
From Virgin Group and Vieco Investments
In addition to the Virgin Money Directors, Virgin Group and Vieco Investments
have each given to Nationwide an irrevocable undertaking to vote in favour (or
procure the voting in favour, as applicable) of the Scheme at the Court
Meeting and the Acquisition Resolution(s) to be proposed at the General
Meeting (or in the event that the Acquisition is implemented by way of a
Takeover Offer, to accept or procure the acceptance of such Takeover Offer) in
respect of their beneficial holdings of Virgin Money Shares:
Name Number of Virgin Money Shares in respect of which undertaking is given Percentage of Virgin Money's issued share capital
Virgin Group 188,083,550 14.5%
Vieco Investments 768,823 0.1%
Total 188,852,373 14.6%
The irrevocable undertakings given by Virgin Group and Vieco Investments will
cease to be binding, inter alia:
· if the Scheme Document or Offer Document (as the case may be) has
not been posted on or before 30 April 2024 (or within such longer period as
Nationwide and (only in relation to the Scheme Document) Virgin Money, with
the consent of the Panel agree), provided that if the Acquisition was
initially being implemented by way of a Scheme, and Nationwide elects to
exercise its right to implement the Acquisition by way of a Takeover Offer or
vice versa, such time period shall be extended to refer to within 28 days of
the issue of the press announcement announcing the change in structure (or
such other date for the posting of the Offer Document or Scheme Document (as
applicable) as the Panel may require);
· on the date on which the Acquisition (whether implemented by way
of a Scheme or a Takeover Offer) is withdrawn or lapses in accordance with its
terms, provided that this shall not apply where the Acquisition is withdrawn
or lapses as a result of Nationwide exercising its right, in accordance with
the Takeover Code, to implement the Acquisition by way of a Takeover Offer
rather than by way of a Scheme or vice versa;
· if the Scheme or the Takeover Offer (as applicable) has not become
Effective, or become or been declared unconditional in all respects (as the
case may be), on or before the Long Stop Date, provided that this shall not
apply where the Scheme or Takeover Offer failing to become effective, or to
become or have been declared unconditional in all respects (as applicable), is
as a result of Nationwide exercising its right, in accordance with the
Takeover Code, to implement the Acquisition by way of a Takeover Offer rather
than by way of a Scheme or vice versa;
· if Nationwide announces that it does not intend to proceed with the
Acquisition and no new, revised or replacement Scheme or Takeover Offer is
announced by Nationwide in accordance with Rule 2.7 of the Takeover Code at
the same time;
· if: (i) a third party announces a firm intention to make an offer
for Virgin Money under Rule 2.7 of the Takeover Code (a "Competing 2.7
Announcement") (whether by way of takeover offer or scheme of arrangement)
which represents an improvement of at least 7.5 per cent. on the total
Acquisition value of 220 pence per share (a "Competing Offer"); and (ii)
following such Competing 2.7 Announcement, Virgin Money announces that the
Virgin Money Board withdraws, qualifies or adversely modifies its
recommendation of the Acquisition; or
· upon any Competing Offer becoming or being declared unconditional in
all respects or otherwise becoming effective.
APPENDIX 4
DEFINITIONS
"Acquisition" the acquisition of the entire issued and to be issued share capital of Virgin
Money by Nationwide to be implemented by way of the Scheme or, should
Nationwide so elect (with the consent of the Panel and subject to the terms of
the Co-operation Agreement) by way of the Takeover Offer, and, where the
context admits, any subsequent revision, variation, extension or renewal
thereof
"Acquisition Resolution(s)" the Resolutions excluding the Virgin Resolution
"Articles" the articles of association of Virgin Money from time to time
"ASX" ASX Limited (ABN 98 008 624 691) or the Australian Securities Exchange, as the
context requires;
"Blocking Law" (i) any provision of Council Regulation (EC) No 2271/1996 of 22 November 1996
(or any law or regulation implementing such Regulation in any member state of
the European Union or the United Kingdom); or (ii) any similar blocking or
anti-boycott law
"Business Day" a day (other than a Saturday, Sunday, public or bank holiday) on which banks
are generally open for business in London, England
"Buyback Programme" the £150 million share buyback programme announced on 23 November 2023 by
Virgin Money on the London Stock Exchange and the ASX
"CDI Voting Instruction Form" the voting instruction form for use by Virgin Money CDI Holders in connection
with each of the Court Meeting and the General Meeting, which shall accompany
the Scheme Document
"CDN" CHESS Depositary Nominees Pty Limited
"CHESS" the Clearing House Electronic Subregister System operated by ASX Settlement
Pty Ltd
"Clean Team Agreement" the clean team agreement entered into between Nationwide and Virgin Money
dated 15 March 2024, a summary of which is set out in paragraph 16 of this
announcement
"Clean Team and Joint Defence Agreement" the clean team and joint defence agreement entered into between Nationwide,
Virgin Money and their respective external counsel dated 4 March 2024, a
summary of which is set out in paragraph 16 of this announcement
"Closing Price" the closing middle market quotation for a Virgin Money Share on the day to
which such price relates, derived from Bloomberg
"Clydesdale Bank" Clydesdale Bank PLC, a public limited company incorporated in Scotland with
registered number SC001111 and whose registered office is at 177 Bothwell
Street, Glasgow, Scotland, G2 7ER
"CMA" the Competition and Markets Authority or any successor regulatory authority
"Combined Group" the Nationwide Group, including the Virgin Money Group, following the
Acquisition becoming Effective
"Companies Act" the Companies Act 2006, as amended from time to time
"Completion" the Acquisition becoming Effective in accordance with its terms
"Conditions" the conditions to which the Acquisition is subject, as set out in Appendix 1
to this announcement and to be set out in the Scheme Document
"Confidentiality Agreement" the confidentiality agreement entered into between Nationwide and Virgin Money
in relation to the Acquisition dated 29 February 2024, a summary of which is
set out in paragraph 16 of this announcement
"Consideration" the consideration of 218 pence in cash per Virgin Money Share payable by
Nationwide to Virgin Money Shareholders pursuant to the Acquisition
"Co-operation Agreement" the co-operation agreement entered into between Nationwide and Virgin Money
dated 21 March 2024, a summary of which is set out in paragraph 16 of this
announcement
"Court" the High Court of Justice in England and Wales
"Court Hearing" the hearing of the Court to sanction the Scheme under section 899 of the
Companies Act
"Court Meeting" the meeting of Scheme Shareholders convened by order of the Court pursuant to
section 899 of the Companies Act for the purpose of considering and, if
thought fit, approving the Scheme (with or without amendment) and any
adjournment thereof
"Court Order" the order of the Court sanctioning the Scheme under section 899 of the
Companies Act
"CREST" the relevant system (as defined in the Uncertificated Securities Regulations
2001 (SI 2001/3755) in respect of which Euroclear UK & Ireland Limited is
the Operator (as defined in the Regulations))
"Dealing Disclosure" has the meaning given in Rule 8 of the Takeover Code
"Disclosed" (a) disclosed by, or on behalf of, Virgin Money in Virgin Money's annual
report and financial statements for the year ended 30 September 2023;
(b) fairly disclosed prior to the date of this announcement by, or on behalf
of, Virgin Money to Nationwide (or its respective officers, employees, agents
or advisers in their capacity as such), including (without limitation) via the
virtual data room operated on behalf of Virgin Money in respect of the
Acquisition or via email;
(c) as otherwise publicly announced by Virgin Money prior to the date of
this announcement (by delivery of an announcement to a Regulatory Information
Service); or
(d) disclosed in this announcement
"Effective" either:
(a) if the Acquisition is implemented by way of Scheme, the Scheme having
become effective pursuant to its terms; or
(b) if the Acquisition is implemented by way of Takeover Offer, the Takeover
Offer having been declared or having become unconditional in accordance with
the requirements of the Takeover Code
"Effective Date" the date on which the Acquisition becomes Effective in accordance with its
terms
"EU" European Union
"Excluded Shares" any Virgin Money Ordinary Shares: (a) registered in the name of, or
beneficially owned by any member of the Nationwide Group (or any person as
nominee for any such member of the Nationwide Group); or (b) held by Virgin
Money in treasury as at the Scheme Record Time
"FCA" the Financial Conduct Authority or any successor regulatory authority
"Forms of Proxy" the forms of proxy for use by Virgin Money Ordinary Shareholders in connection
with each of the Court Meeting and the General Meeting, which shall accompany
the Scheme Document
"FSMA" the Financial Services and Markets Act 2000, as amended from time to time
"FY" a financial year of Virgin Money, ending on 30 September;
"General Meeting" the general meeting of Virgin Money Shareholders to be convened to consider
and, if thought fit, approve the Resolutions (with or without amendment)
including any adjournment, postponement or reconvening thereof
"group undertaking" has the meaning given in section 1161 of the Companies Act
"Independent Virgin Money Directors" the Virgin Money Directors excluding Sara Weller
"Independent Virgin Money Shareholders" the Virgin Money Shareholders excluding Virgin Group, any of its group
undertakings and any person or undertaking under common control with Virgin
Group (including Vieco Investments)
"J.P. Morgan Cazenove" J.P. Morgan Securities plc, which conducts its UK investment banking business
as J.P. Morgan Cazenove
"Last Practicable Date" 20 March 2024
"Listing Rules" the rules and regulations made by the FCA under FSMA and contained in the
publication of the same name, as amended from time to time or (as applicable)
any set of rules and regulations replacing the same from time to time
"London Stock Exchange" London Stock Exchange plc
"Long Stop Date" 31 January 2025 or such later date, if any, (a) as Nationwide and Virgin Money
may agree, or (b) (in a competitive situation) as may be specified by
Nationwide with the consent of the Panel, and in each case that (if so
required) the Court may allow
"Market Abuse Regulation" Regulation (EU) No 596/2014, as it forms part of domestic law of the United
Kingdom by virtue of the European Union (Withdrawal) Act 2018, as amended from
time to time
"Meetings" the Court Meeting and the General Meeting
"Nationwide" Nationwide Building Society, a building society authorised by the PRA and
regulated by the FCA and the PRA under registration number 106078
"Nationwide Board" the board of directors of Nationwide
"Nationwide Group" Nationwide and its group undertakings from time to time
"Offer Document" should the Acquisition be implemented by means of the Takeover Offer, the
document to be sent to Virgin Money Shareholders which will contain, amongst
other things, the terms and conditions of the Takeover Offer
"Offer Period" the offer period (as defined in the Takeover Code) relating to Virgin Money
which commenced on 7 March 2023
"Official List" the official list maintained by the FCA pursuant to Part 6 of FSMA
"Opening Position Disclosure" has the meaning given in Rule 8 of the Takeover Code
"Overseas Shareholders" Virgin Money Shareholders who are resident in, ordinarily resident in, or
citizens of, jurisdictions outside the United Kingdom
"Panel" the Panel on Takeovers and Mergers
"PRA" the Prudential Regulation Authority as defined in FSMA or any successor
regulatory authority
"Registrar of Companies" the registrar of companies in England and Wales
"Resolutions" the resolutions to be proposed at the General Meeting in connection with the
implementation of the Acquisition, including, amongst other things, to make
certain amendments to the Articles and the Virgin Resolution
"Restricted Jurisdiction" any jurisdiction where local laws or regulations may result in a significant
risk of civil, regulatory or criminal exposure if information concerning the
Acquisition is sent or made available to Virgin Money Shareholders in that
jurisdiction
"Scheme" the proposed scheme of arrangement under Part 26 of the Companies Act between
Virgin Money and Scheme Shareholders to implement the Acquisition
"Scheme Convening Hearing" the hearing of the Court to give permission to Virgin Money to convene the
Court Meeting;
"Scheme Document" the document to be dispatched to Virgin Money Shareholders and other persons
with information rights setting out, amongst other things, the details of the
Acquisition, the full terms and conditions of the Scheme and containing
notices convening the Meetings
"Scheme Record Time" the time and date specified as such in the Scheme Document, expected to be
6.00 p.m. on the day of the Court Hearing, or such other time as Nationwide
and Virgin Money may agree
"Scheme Shareholder" a holder of Scheme Shares
"Scheme Shares" all Virgin Money Ordinary Shares (including, for the avoidance of doubt, those
Virgin Money Ordinary Shares underlying Virgin Money CDIs):
(a) in issue at the date of the Scheme Document;
(b) (if any) issued after the date of the Scheme Document and prior to the
Voting Record Time; and
(c) (if any) issued at or after the Voting Record Time and prior to the
Scheme Record Time in respect of which the original or any subsequent holder
thereof is bound by the Scheme, or shall by such time have agreed in writing
to be bound by the Scheme,
but excluding any Excluded Shares
"subsidiary" has the meaning given in section 1159 of the Companies Act
"subsidiary undertaking" has the meaning given in section 1162 of the Companies Act
"Takeover Code" the City Code on Takeovers and Mergers, as amended from time to time
"Takeover Offer" should the Acquisition be implemented by way of a takeover offer as defined in
Chapter 3 of Part 28 of the Companies Act, the offer to be made by or on
behalf of Nationwide to acquire the entire issued and to be issued share
capital of Virgin Money and, where the context admits, any subsequent
revision, variation, extension or renewal of such offer
"TMLA" the brand licence agreement between Virgin Money and Virgin Enterprises, to
which Virgin Money became a party on 18 June 2018
"TMLA Amendment Agreement" the agreement entered into between Nationwide and Virgin Enterprises on 7
March 2024 (as amended by a side letter dated 21 March 2024) pursuant to which
the parties have agreed to procure that a deed of amendment in respect of the
TMLA is entered into shortly following Completion
"UBS" UBS AG, London Branch
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland
"US" or "United States" the United States of America, its territories and possessions, any state of
the United States of America and the District of Columbia
"Vieco Investments" Vieco Investments Limited, a company limited by shares incorporated in the
British Virgin Islands with registered number 1875318 and whose registered
office is at Craigmuir Chambers, Road Town, Tortola, British Virgin Islands,
VG 1110, controlled by Sir Richard Branson
"Virgin Enterprises" Virgin Enterprises Limited, a private limited company incorporated in England
and Wales with registered number 01073929 and whose registered office is at 66
Porchester Road, London, United Kingdom, W2 6ET
"Virgin Group" Virgin Group Holdings Limited, a company limited by shares incorporated in the
British Virgin Islands with registered number 650373 and whose registered
office is at Craigmuir Chambers, Road Town, Tortola, British Virgin Islands,
VG 1110
"Virgin Money" Virgin Money UK PLC, a public limited company incorporated in England and
Wales with registered number 09595911 and whose registered office is at
Jubilee House, Gosforth, Newcastle Upon Tyne, England, NE3 4PL
"Virgin Money Board" the board of directors of Virgin Money
"Virgin Money CDIs" CHESS Depositary Interests of Virgin Money, each representing a unit of
beneficial ownership in one Virgin Money Ordinary Share, registered in the
name of the depository nominee, CDN, and which are listed on the ASX
"Virgin Money CDI Holders" the holders of Virgin Money CDIs
"Virgin Money Directors" the directors of Virgin Money as at the date of this announcement
"Virgin Money Group" Virgin Money and its group undertakings from time to time
"Virgin Money Ordinary Shareholders" the holders of Virgin Money Ordinary Shares
"Virgin Money Shareholders" Virgin Money Ordinary Shareholders and Virgin Money CDI Holders, unless the
context requires otherwise
"Virgin Money Share Plans" the Virgin Money UK plc Long Term Incentive Plan, the Virgin Money Deferred
Equity Plan, the Virgin Money Share Incentive Plan, the Virgin Money Deferred
Bonus Share Plan and the Virgin Money Long Term Incentive Plan
"Virgin Money Ordinary Shares" the ordinary shares of 10 pence each in the capital of Virgin Money
"Virgin Money Shares" Virgin Money Ordinary Shares and Virgin Money CDIs, unless the context
requires otherwise
"Voting Record Time" 6.00 p.m. on the day falling two Business Days prior to the Court Meeting or
any adjournment thereof (as the case may be)
"Virgin Red" Virgin Red Limited, a private limited company incorporated in England and
Wales with registered number 09595911 and whose registered office is at 66
Porchester Road, London, United Kingdom, W2 6ET
"Virgin Red Exclusivity Agreement" the exclusivity agreement entered into between Nationwide and Virgin Red on 21
March 2024, a summary of which is set out in paragraph 4 of this announcement
"Virgin Resolution" the ordinary resolution to be put to the Independent Virgin Money Shareholders
in relation to the TMLA Amendment Agreement (including the amendment of the
TMLA to be effected pursuant to it) and the Virgin Red Exclusivity Agreement
for the purposes of Note 2 on Rule 16.1 of the Takeover Code
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