Clydesdale and Yorkshire banks owner CYBG snaps up Virgin Money

VIRGIN Money has declined to comment on a report that is expected to agree to a £1.6bn takeover by CYBG, the owner of Clydesdale and Yorkshire banks.

The firms admit "there will be a loss of jobs" as a result of the deal with the bulk of the cuts impacting senior management staff.

Virgin Money shares rose more than 2 percent before paring their gains to trade little changed at 355p by 0810 GMT.

The revised offer valued Virgin Money at around £ 1.6 bn.

CYBG/Virgin would have around 250 branches, compared with 893 for RBS and 1,795 for Lloyds.

Virgin Money shareholders would receive 1.2125 new CYBG shares under the offer, according to a statement Monday.

The new share structure would see Virgin investors own approximately 38% of the combined group, they said.


Virgin Group CEO Josh Bayliss said CYBG is the partner Virgin Money needs to continue to grow.

Clydesdale's chief executive David Duffy, who will lead the merged business, said the deal aimed at capitalising on Virgin's highly-rated brand in an environment in which banking is being transformed by the shift towards "open" banking - a system that allows customers more control over their financial data.

Like Duffy, CYBG's chairman, Jim Pettigrew and its finance director Ian Smith will all retain their roles in the combined group.

"The combination of CYBG and Virgin Money will create the first true national competitor to the status quo in United Kingdom banking, offering a genuine alternative for consumers and small businesses", he said in a statement.

Gadhia said: 'This is a compelling deal for our shareholders, that accelerates value delivery and represents the beginning of the next chapter of the Virgin Money story'.

Virgin Money, which was founded in 1995, expanded its business in 2011 when it bought the remnants of Northern Rock for about £747m.

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