1,500 jobs at risk in Vir­gin-CYBG merger

The Sunday Telegraph - Money & Business - - Front Page - By Iain Withers

AS MANY as 1,500 jobs could go as a re­sult of the merger of Vir­gin Money and Cly­des­dale and York­shire Bank­ing Group (CYBG) as top in­vestors de­mand that the axe is swung to win their sup­port for the £4bn tie-up.

CYBG won backing in prin­ci­ple from the Vir­gin Money board for an im­proved all-share pro­posal last week. It has un­til June 18 to make a firm of­fer. Sir Richard Bran­son is ef­fec­tively “king­maker” in the deal, with his Vir­gin Group locked in talks with CYBG over the cost and scope of a li­cence agree­ment for use of the Vir­gin name.

But sup­port from other Vir­gin Money in­vestors is far from as­sured. A top-10 share­holder in the bank told The

Sun­day Tele­graph that the duo needed to present cred­i­ble plans “to cut at least 15pc of the com­bined cost base”.

“Above that thresh­old, the ben­e­fits of the deal would be sig­nif­i­cant enough,” the in­vestor said. Ap­plied to the banks’ com­bined 10,000 head- count, this would im­ply 1,500 re­dun­dan­cies. It is thought that sav­ings may also come from IT and op­er­a­tional ef­fi­cien­cies.

Vir­gin Money’s re­sponse to CYBG’S re­vised ap­proach raised eye­brows. While it gets a greater share of the com­bined com­pany – 38pc, up from 36pc – the mone­tary value fell due to an in­ter­ven­ing dip in CYBG’S share price.

CYBG and Vir­gin Money de­clined to com­ment.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.