Debbie Crosbie is a CEO in a hurry.
The Nationwide boss fears that if the mutual lender cannot make its bid for Virgin Money within 28 days, the time prescribed by the city’s Takeover Panel referee, the mutual’s opportunity of a lifetime could be lost.
Since unveiling its bid for Virgin Money on March 7, Nationwide has come under pressure to give the building society’s approximately 16 million members a say.
The funding behind the deal will come from national resources and technically that money could be used to improve benefits for existing members in the form of better interest returns, more competitive interest rates and bonuses.
Instead, billionaire Richard Branson will become richer with a 14 per cent stake in Virgin Money worth £400m and executives entitled to £6m in payouts.
Deadline: National boss Debbie Crosbie (pictured) fears mutual lender will lose the opportunity of a lifetime if prevented from bidding for Virgin Money
Nationwide believes it would be impossible to give 16 million members a say in a tight time frame.
There are no public companies with such a long tail of private investors. If it were to give members a vote, it could mean a six-month exit, during which time economic conditions could change or another buyer could come forward.
Crosbie and her team are trying to gauge members’ opinions through opinion polls, which so far have shown no arguments against the transaction.
The view within Nationwide is that this is a special opportunity to bring Northern Rock’s collective assets back to the sector and extend its reach into commercial lending.
The dilution of member benefits will be resolved over time as assets bought for 60p in the pound throw away cash.
Arguments for going ahead with the job are compelling and Nationwide promises thorough due diligence has been carried out.
Determination to thwart the deal by contrasting with Nationwide’s call for patience and care as the integration of Virgin Money takes place.
No one wants a repeat of the chaos and fraud we saw when Spanish bank Sabadell transferred TSB customers to its platform.
A larger, more competitive head-to-head sector would be a great choice. But the risks of a deal without the consent of the ultimate owners should not be taken for granted.
Greetings to Mr. Patrick
Reaching 100 years is an achievement for anyone. In the case of Sir Patrick Sergeant, it is a milestone that reminds us of his achievements.
As city editor of the Ny Breaking from 1960 to 1984, he transformed financial journalism by making it accessible to readers, providing insights drawn from his experiences on the London trading floor and unparalleled access to the great and the good, including every Chancellor . from Derick Heathcoat-Amory to Nigel Lawson.
Unusually for a financial commentator, Sergeant had the flair and skills of an entrepreneur.
He recognized Ny Breaking readers’ need for advice on how to save, buy a house and spend money wisely by creating Money Mail.
The section was replicated in Fleet Street with similar personal finance pages.
He was one of the first to recognize London’s rise as the banking capital of the world and convinced its owner, the late Vere Harmsworth, to back his idea of Euromoney, a glossy and brilliantly informed magazine serving global banking. From such beginnings, an information powerhouse has emerged.
As one of Sergeant’s successors as city editor (I inherited this spot upon the retirement of the late Andrew Alexander in 2000), it is my pleasure to wish Patrick many happy outcomes on behalf of our city, financial and business writers and all readers who have benefited from the wisdom passed down from generation to generation.
False economy
It is good to see British defense contractor Chemring win a £57 million contract from the EU to ease the bottleneck in the supply of ammunition to Ukraine.
Imagine how much better Britain’s defense businesses, exports and profits would be if so many innovators had not been sold to private equity and foreign buyers.