Virgin share probe after rival’s £1.6bn bid

CITY watchdogs are investigating a surprise rise in Virgin Money’s share price before it announced a £1.6bn takeover offer from the owner of Yorkshire Bank.

Shares rose 15pc last week before CYBG’s bid was unveiled yesterday morning, which caused a further rise of 9.9pc, or 30.9p, to 343.3p.

Last night the Financial Conduct Authority launched a probe as large moves in share prices, particularly ahead of a takeover deal, can be a sign of insider dealing.

A tie-up between the two firms would give Virgin and CYBG more muscle to take on the big names.

It is offering to buy Virgin Money in a £1.6bn all-share takeover which would give the brand’s founder Sir Richard Branson a £560m stake in the merged group.

CYBG is offering 15pc more than Virgin shares were worth before its approach was made public. But analysts said this is still not a reflection of its true value.

An FCA spokesman said they ‘conduct surveillance on a daily basis and routinely look at unusual or sudden changes in price’.