A rearguard action by members of Nationwide Building Society to block its £2.9 billion takeover of Virgin Money is gathering steam, though the society insists it has no chance of success.
Mikael Armstrong, organiser of the campaign to give 16 million members a say on the controversial deal, has collected a petition of 1000 names who say it should go to a vote.
Armstrong has accused the society, the biggest building society in the world, of strong arm tactics.
He said: “I started the petition to give Nationwide members a say on the proposed takeover of Virgin Money. At various stages along the way, I have been gagged or ignored - just like other Nationwide members.”
The society, led by Debbie Crosbie, thinks the deal will be good for members. It intends to run Virgin Money separately for the first four years before a proper integration begins.
A Nationwide spokesman said: “Nationwide’s board believes that the acquisition of Virgin Money offers compelling benefits for the building society’s current and future members. Virgin Money profits retained by the Nationwide Group will improve the financial strength of our Society. This means we will be able to provide a greater level of member financial benefits and incentives, including through better savings and mortgage rates compared to the market average.”
The spokesman denies any attempt to gag members. It added: “Nationwide has communicated regularly and openly with its 16 million members, including several letters and emails. It has also conducted widespread polling of its members, which has shown very strong support for the transaction.”
The petition at change.org could put pressure on the board however.
Armstrong said: “The board and management of Nationwide appears to be going to extraordinary lengths to rush through a deal to fill the pockets of Virgin Money shareholders with Nationwide members' capital, and without detailed due diligence and proper consideration at the expense of the society's members.”
He added: “Nationwide members want - and must be given - a vote on the proposed takeover of Virgin Money. Denying the society's members, its own customers and owners, a vote on the deal is now an obscene show of arrogance.”
A combination of Nationwide and Virgin would create the UK’s second biggest savings and loan business after Lloyds Bank.
Sir Richard Branson’s Virgin Group will get £400 million for its 14.5% stake in Virgin Money.
Nationwide says the City Takeover Panel would not allow a member vote on the deal. It says City analysts note that Nationwide would be acquiring assets cheaply – at 60p in the pound.
