Nationwide’s £2.9billion attempt to take over Virgin Money has won the backing in principle of the most influential lobby group for mutuals.
Peter Hunt, founder of Mutuo, the UK’s leading advocate for building societies and co-ops, said a successful deal would be a watershed moment.
‘This is what the sector needs,’ he said. ‘Building societies have been on the back foot for 35 years, being taken over by banks and having to justify their existence. It has the potential to change the weather.’
The bid by Nationwide, under chief executive Debbie Crosbie, would be the first takeover by a building society of a bank on this scale in the UK.
Hunt said he was not qualified to give a view on the financial merits of the transaction, but he added: ‘Nationwide’s top team has managed the business well, which gives me confidence. This has the potential to be a watershed for the whole mutual sector. If I am going to trust anyone, I am going to trust them.’
Sign of the times: The bid by Nationwide would be the first takeover by a building society of a bank on this scale in the UK
The proposed takeover has angered some members of Nationwide who are being denied a vote. A petition demanding a say has garnered more than 1,000 signatures.
Nationwide’s internal polling suggests most of its 16million members would support the bid. Many customers, however, do not realise it is happening. Nationwide insists it is not required to offer its members a vote. Gaining support from Mutuo is a boost for Crosbie.
In 2021, Mutuo was involved in a successful campaign alongside the Daily Mail to stop mutual insurance company LV selling itself to private equity.
Hunt said the deal ‘changes the narrative for mutuals’ and opens up opportunities for businesses to bank with a mutual. Nationwide is the biggest building society in the UK and, as a mutual, it is owned by members.
Virgin Money’s shareholders, the biggest of whom is Sir Richard Branson, get a vote on the takeover.
A court hearing this week will determine whether Branson, who has backed the deal, will be permitted to vote. His Virgin Group stands to make up to £400m from its 14 per cent stake.
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