Nationwide Building Society’s controversial £2.9 billion takeover of Virgin Money hit a potentially serious hiccup today when the Competition and Markets Authority launched a probe into the deal.
The takeover has faced opposition from some of the group’s 16 million members.
Nationwide believes it is getting VM assets on the cheap and will create a new powerful savings and loans giant.
The CMA said it will look at “whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services”.
Written representations on the issue are invited to Nationwide.VirginMoney@cma.gov.uk.
The membership group fighting to give members a note on the deal said: “The fate of this ill-conceived and undemocratic acquisition is now in the hands of regulators. We welcome the CMA’s investigation - and trust it will carefully scrutinise the impact on competition of merging the safest and largest building society that provides more that 1 in 10 UK mortgages with a poorly rated, Frankenstein bank that no one else wants to buy.”
Crosbie used to work for Virgin Money. She sold shares in the business at 170p before launching a takeover bid for 220p a share. That left some asking why she is trying to buy the lender for much more than she sold her own stake.
Virgin Money shareholders, including Sir Richard Branson, have already backed the offer.
Neither Nationwide nor Virgin Money had any comment on the CMA probe.
