Nationwide’s great rush
Debbie Crosbie is a chief executive in a hurry. The Nationwide boss is fearful that if the mutual lender is prevented from making its bid for Virgin Money within 28 days, the time prescribed by City referee the Takeover Panel, the opportunity of a lifetime for the mutual sector could be lost.
Since unsheathing its bid for Virgin Money on March 7, Nationwide has come under pressure to give the building society’s 16m or so members a say.
The funding behind the deal will come from Nationwide resources and technically that money could be used to improve the benefits to existing members in the shape of better interest rate returns, more competitive lending rates and bonuses.
instead, those getting richer from the deal will be billionaire Richard branson with 14pc in Virgin Money worth £400m and executives entitled to £6m in payouts.
Nationwide believes it would be impossible to give 16m members a say within a narrow timetable.
There are no public companies with such a long tail of private investors. if it were to give members a vote, it could mean going away for six months during which time economic conditions could change or another buyer swoop in.
Crosbie and her team are seeking to measure members’ views by polling, which so far shows no case against the transaction. The view within Nationwide is that this is a special opportunity to bring the Northern Rock mutual assets back to the sector and to increase its reach into business lending.
Dilution of members’ benefits will be resolved over time when assets, bought for 60p in the pound, throw off cash.
Arguments for getting on with the job are attractive and Nationwide pledges that thorough due diligence has be done.
Determination to ramrod the deal through contrasts with Nationwide’s call for patience and care as integration of Virgin Money takes place. No one wants a repeat of the chaos and fraud seen when Spanish bank Sabadell transferred TSB customers onto its platform.
A bigger, more competitive mutual sector would be terrific for choice. but the risks of a deal, without the consent of ultimate owners, should not be taken for granted.
Salute to Sir Patrick
REACHING 100 years is an achievement for anyone. in the case of Sir Patrick Sergeant, it is a landmark which reminds us of his accomplishments.
As City editor of the Daily Mail from 1960 to 1984, he transformed financial journalism by making it accessible to readers, providing insights which came from his experiences on the floor of the London Stock exchange and unrivalled 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 panache and skills of an entrepreneur. he recognised the need of
Daily Mail readers for advice on how to save, buy a home and spend money, sensibly, creating Money Mail. The section was emulated across Fleet Street with similar personal finance pages.
he was among the first to recognise London’s rise as the banking capital of the world and persuaded his proprietor, the late Vere harmsworth, to back his idea of euromoney, a glossy and brilliantly well informed magazine to service global banking. From such beginnings an information powerhouse was created.
As one of Sergeant’s successors as City editor (i inherited this slot on the retirement of the late Andrew Alexander in 2000), it is my pleasure to wish Patrick many happy returns on behalf of our City, financial and business writers and all the readers who have benefited from wisdom which has cascaded down the generations.
False economy
gooD to see UK defence contractor Chemring win a £57m contract from the eU to ease supply bottlenecks in the effort to provide ammunition to Ukraine.
imagine, how much better british defence firms, exports and profits would be doing had not so many innovators been sold to private equity and overseas buyers.