Virgin court case offers chance to save Nationwide

THERE’S an interesting court case tomorrow at London’s Commercial Court, the Rolls Building, Mr Justice Meade presiding.

The case could put a spanner in the works of Nationwide Building Society’s £2.9 billion takeover of Virgin Money, or at least delay it long enough for Nationwide members who just hate this deal in the first place to get their act together.

One box that has to be ticked is for 75% of Virgin Money shareholders to give it approval.

At issue is whether Richard Branson’s Virgin Group counts as an ordinary shareholder.

It owns 15% of the stock, but it also has a special licensing deal for use of the brand name, which is worth about £250 million on top of the £400 million for the stake.

So, effectively, he gets £3.60 a share, other investors get £2.20.

To my mind £2.20 a share is already too much for this ragtag bank formed of various mergers and given a red lick of smiley paint.

And if you aren’t suspicious about this deal, that Branson gets £650 million from it ought to make you so. At its worst, it could ruin Nationwide and make everyone’s future mortgage more expensive. For ever.

The other “ordinary” shareholders include Allan Gray, a South African fund manager, and the Americans BlackRock, Vanguard and JP Morgan.

They may have zero concern for the future of Nationwide Building Society, needless to say, but they might decide they want the same terms as the Branson deal under the misguided impression that Virgin Money is worth more than £2.9 billion (it isn’t).

In which case, there’s a hitch to say the least.

If it annoys you that a bunch of super rich South Africans and Americans get to decide the fate of the Nationwide while members don’t even get a vote, join the club.

In fact, seriously, join the club. The website fighting to give Nationwide members a say on this dreadful deal is here: https:// nationwide-virgin-moneymember-vote.org.uk/