LONDON (Reuters) - Virgin Money (LON:VMUK), the British challenger bank founded by entrepreneur Richard Branson, could be swallowed up by mutually-owned lender Nationwide, in a surprise 2.9 billion pound potential deal, the companies said on Thursday.
The proposed takeover, still subject to conditions, serves as a milestone for the UK banking industry, and would consign one of its best-known and fastest-growing brands to history after Nationwide said it planned to phase out the Virgin brand.
The following are key steps on Virgin Money's three-decade long journey.
Branson pushed Virgin, a mobile phones-to-flights group, into financial services in 1995. The group offered credit cards, insurance, savings and pensions in the UK, and also sold products in Australia and South Africa.
In 2007, Virgin made a play for British bank Northern Rock - once a mutually-owned building society like Nationwide - after it suffered the first run on a major UK bank for more than 140 years amid a funding crisis. The talks failed and Northern Rock was nationalised.
Virgin tried again and in 2011 the British government agreed to sell Northern Rock for close to 1 billion pounds. In October 2012, Northern Rock plc was renamed Virgin Money plc.
Virgin made a lukewarm stock market debut in 2014 with a sale that netted 140 million pounds for its billionaire backers, which included Branson and financier Wilbur Ross.
In a bid to scale up and compete with bigger rivals, in 2018 Clydesdale and Yorkshire Banking Group bought Virgin in a 1.7 billion pound all-share takeover. CYBG rebranded the combined bank as Virgin Money - management hoped the association with Branson's brand would help fuel growth.
Branding arrangements between Branson's Virgin group and the bank were considered a stumbling block to any acquisition, but one that was seemingly overcome this week after Nationwide said it would phase out the brand over 6 years.
Virgin said in 2021 it would shut one in five branches as customers shifted online. The bank had promoted its branches as "community-focused spaces" to "brighten ... lives".
Before Nationwide's bid was announced on Thursday, Virgin Money's share price had fallen about 10% since early 2016 - valuing the bank at about 2 billion pounds at Wednesday's close - and was 57% lower than 2018's peak share price.