Proactive Investors - Virgin Money (LON:VMUK) has agreed to be taken over by Nationwide Building Society (LON:NBS) at 218p per share, representing a 37% premium to yesterday's closing price.
In a joint statement, the companies said the deal “would combine two complementary businesses”.
The potential acquisition would create a combined group with total assets of approximately £366.3 billion and total lending and advances of approximately £283.5 billion, making it the second-largest provider of mortgages and savings in the UK, according to the joint statement.
Chairman of Nationwide Building Society Kevin Parry commented: “The combination would increase Nationwide's scale and financial strength, put us in a stronger position to continue to provide Fairer Share Payments to eligible Nationwide members, and offer rates for mortgages and savings that are, on average, better than the market average."
Chief executive of Virgin Money UK David Duffy added: "This potential transaction with Nationwide represents an exciting opportunity to build on the significant progress we have made in becoming the only new Tier 1 bank in recent history.
“The combined scale and strength would expand our customer offering and complete our journey in the banking sector as a national competitor."
House prices remain ‘stable’
The Halifax House Price Index showed a 1.7% year-on-year rise in February, slowing from 2.3% in January.
Month on month, the index added 0.4% compared to 1.2% the previous month.
Kim Kinnaird, director of Halifax Mortgages, commented: “These figures continue to suggest a relatively stable start to 2024 and align with other promising signs of increased housing activity, such as mortgage approvals.
“In fact, the average price tag of a home is now only around £1,800 off the peak seen in June 2022.
“While it is encouraging that we’ve seen growth in recent months, what happens next remains uncertain. Although lower mortgage rates, alongside expectations of Bank of England interest rate cuts this year, should help buyer confidence in the short term, the downward trend on rates is showing signs of fading.”
FTSE to open flat
The blue-chip index will open flat at 7,651 today following a bullish post-Budget performance on Wednesday.
Stocks gained ground in the wake of Jeremy Hunt’s Spring Budget, with energy firms being boosted late on in the day.
On today’s economic calendar, the Halifax House Price Index showed house prices rising 1.7% in February, a slowdown from 2.3% in January.
Month on month, prices added 0.4%.
In company news, insurer Aviva plc (LON:AV) will soon provide its financial results, with adverse weather conditions the main topic of interest.
It is a packed earnings day all around, with ITV PLC (LON:ITV), Admiral Group (LON:ADML), Entertain, Melrose and recruiters PageGroup (LON:PAGE) and Robert Walters also releasing their financials.