Clifford Chance, Slaughter and May lead on Nationwide’s proposed £2.9bn Virgin Money bid

Slaughters advises Nationwide on deal to create UK’s second-largest savings and mortgage provider as CC reps Virgin Money

Clifford Chance (CC) and Slaughter and May are leading on Nationwide Building Society’s bid to buy Virgin Money, in a potential £2.9bn all-cash deal that would be the biggest UK bank takeover since the 2008 financial crisis.

A Slaughters team led by corporate partner David Watkins is advising Nationwide on the possible acquisition, while CC is repping longtime client Virgin Money.  

CC’s London-based team is led by corporate partners David Pudge and Katherine Moir, with support from partners Sonia Gilbert and Chinwe Odimba-Chapman (both employment), Simon Sinclair (ECM), Simon Crown (financial regulation) and Sue Hinchliffe (competition).

A Clifford Chance team also advised the Clydesdale and Yorkshire bank group (CYBG) in 2018 when it bought Virgin Money, repped by Allen & Overy, for £1.7bn. Slaughters acted for major Virgin Money shareholder Virgin Group on the matter, which saw the combined business rebrand under the Virgin name.  

Nationwide said its offer of 220p for each Virgin Money share represented a 38% premium to the bank’s closing share price on Wednesday and would be funded through the mutual’s existing cash resources.  

If successful the deal would mark a rare acquisition of a listed company by a mutual and another instance of consolidation among mid-tier lenders in the UK, which have struggled to break the market share of bigger banks.  

Last month Barclays said it would buy most of the banking operations of supermarket group Tesco for about £600m, with Freshfields Bruckhaus Deringer and Hogan Lovells called in to advise the respective parties. Analysts have said Nationwide’s move could prompt deals by other lenders looking to preserve market share.

Nationwide said the Virgin Money acquisition would allow it to “accelerate its strategy and broaden and deepen its products and services faster than could be achieved organically”, adding it would give it “access to greater diversity of funding, notably from business deposits”.

If a deal is finalised the combined group will have assets of around £366bn, making it the country’s second-largest savings and mortgage provider behind Lloyds Banking Group.  

Virgin Group, which still holds around 14.5% of Virgin Money’s total shares in issue, has also indicated support for the deal.

UBS is acting as financial adviser to Nationwide on the matter, while Goldman Sachs and JP Morgan Cazenove are acting as joint financial advisers and joint corporate brokers to Virgin Money.  

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