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Britain’s Nationwide eyes near $2 billion gain on Virgin Money deal
By Stella
LONDON, May 23 (Reuters) – Nationwide Building Society (NBS.L), opens new tab said it could realise as much as a 1.5 billion pound ($1.91 billion) gain on its acquisition of rival Virgin Money, announced earlier this year and expected to close in the fourth quarter.
The gain reflects the gap between Virgin Money’s (VMUK.L), opens new tab tangible net asset value of 4.4 billion pounds and the acquisition price of 2.9 billion pounds, Nationwide said, noting that the final figures on completion could vary.
The deal showed Nationwide’s strong financial position as a member-owned society with a cheaper cost of capital than many rivals, Chief Executive Debbie Crosbie told Reuters.
“Strategically as a mutual that puts us in quite a different place to not only make the acquisition, but deliver value and benefit back to our members,” she said, adding that Virgin Money customers should benefit in the long run as well.
Nationwide also reported that its annual profit fell to 1.8 billion pounds ($2.29 billion), from 2.2 billion a year earlier as competition in the mortgage market squeezed margins.
Source: REUTER
