# Virgin Money Confirms Offer from from CYBG Plc

- Link: https://www.directorstalkinterviews.com/virgin-money-confirms-offer-cybg/412750716
- Published: 2018-05-08T08:12:35+01:00
- Author: Giles Arbor

**Virgin Money Holdings (UK) plc** (LON:VM.) today comments on the media speculation,
and confirms that on the evening of 7 May 2018, it received a preliminary and conditional
proposal from CYBG to acquire the entire issued and to be issued share capital of
Virgin Money. Under the terms of the proposal, Virgin Money shareholders would receive
1.1297 new CYBG shares for each Virgin Money share. The Board of Virgin Money is
in the process of reviewing this proposal.

There can be no certainty either that an offer will be made nor as to the terms 
of any offer, if made. Accordingly, shareholders are advised to take no action in
relation to this proposal.

A further announcement will be made in due course.

In accordance with Rule 2.6(a) of the Code, Virgin Money announces that, by not 
later than 5.00 pm on 4 June 2018, CYBG must either announce a firm intention to
make an offer for Virgin Money under Rule 2.7 of the Code or announce that it does
not intend to make an offer for Virgin Money, in which case the announcement will
be treated as a statement to which Rule 2.8 of the Code applies. This deadline will
only be extended with the consent of the Takeover Panel in accordance with Rule 
2.6(c) of the Code.

This announcement is being made without the consent of CYBG.

The person responsible for arranging for the release of this announcement on behalf
of Virgin Money is Katie Marshall.

 

**CYBG PLC** (LON:CYBG) notes the above announcement made by Virgin Money and confirms
that it has today made a preliminary approach regarding a potential all share combination
of CYBG and Virgin Money (the “Proposal”).

Under the terms of the Proposal, CYBG would acquire all the issued and to be issued
ordinary share capital of Virgin Money on the basis of an exchange ratio of 1.1297
new CYBG shares for each Virgin Money share. Under the terms of the Proposal, Virgin
Money shareholders would own approximately 36.5%1 of the combined group.

The Proposal provides the Virgin Money shareholders with an attractive up-front 
premium and the opportunity to participate in the continuing progress of the combined
group, including sharing in the opportunity for value creation from the substantial
synergy potential resulting from the combination.

CYBG recognises the strength and appeal of the Virgin Money brand. Our proposal 
would ensure that the Virgin Money brand would play a significant role in the combined
group, subject to reaching agreement with Virgin Group Holdings Limited.

CYBG believes the combination would create the UK’s leading challenger bank offering
both personal and SME customers a genuine alternative to the large incumbent banks.
The combination would provide a powerful full-service banking offer, including leading
digital and mobile banking services, for 6 million personal and business customers,
bringing together the complementary strengths of CYBG and Virgin Money. With this
further strengthened customer franchise and national reach, CYBG believes the combination
would deliver increased value for shareholders and wider benefits to other stakeholders.

Further announcements will be made in due course as appropriate, but there can be
no certainty that a formal offer will be made. The Board will only proceed with 
a transaction if it is in line with CYBG’s strategic objectives and is in the best
interests of CYBG shareholders.

In accordance with Rule 2.6(a) of the Code, by not later than 5.00 p.m. on 04 June
2018, CYBG will be required to either announce a firm intention to make an offer
for Virgin Money in accordance with Rule 2.7 of the Code or announce that it does
not intend to make an offer, in which case such announcement will be treated as 
a statement to which Rule 2.8 of the Code applies. This deadline will only be extended
with the consent of the UK Takeover Panel in accordance with Rule 2.6(c) of the 
Code.

In accordance with Rule 26.1 of the Code, a copy of this announcement will be available(
subject to certain restrictions relating to persons resident in restricted jurisdictions)
on CYBG’s website at www.cybg.com/investor-centre/company-announcements/. The content
of this website is not incorporated into, and does not form part of, this announcement.

In accordance with Rule 2.9 of the Code, CYBG confirms that, as at close of business
on 4 May 2018, it had 885,151,593 ordinary shares of 10 pence each in issue (held
as ordinary shares and CHESS Depositary Interests (CDIs) (each CDI representing 
1 ordinary share)). The ordinary shares are admitted to trading on the main market
for listed securities of the London Stock Exchange plc with the International Securities
Identification Number (ISIN) GB00BD6GN030. The CDIs are admitted to trading on the
Australian Securities Exchange with the ISIN AU000000CYB7. CYBG holds no shares 
in treasury.

Reservations

The Proposal does not impose any obligation on CYBG to make an offer, nor does it
evidence a firm intention to make an offer within the meaning of the Code. CYBG 
does not, therefore, regard it as forming the basis for an announcement pursuant
to Rule 2.2(a) of the Code.

CYBG also reserves the right:

· to make an offer at any time on reduced terms than 1.1297 new CYBG shares for 
each Virgin Money share:

o with the agreement or recommendation of the Board of Directors of Virgin Money;

o if a third party announces a firm intention to make an offer for Virgin Money 
pursuant to Rule 2.7 of the Code, which, at that date is valued at a lower price
than the value of 1.1297 new CYBG shares for each Virgin Money share;

o if Virgin Money announces, declares or pays any dividend or any other distribution
to shareholders, in which case CYBG reserves the right to make an equivalent reduction
in its offer terms; or

o following announcement by Virgin Money of a whitewash transaction pursuant to 
the Code; and

· to introduce other forms of consideration and/or vary the mix or composition of
consideration of any offer.

Any firm offer in accordance with Rule 2.7 of the Code will be subject to, amongst
other things, satisfactory completion of due diligence, the recommendation of Virgin
Money’s Board of Directors and reaching agreement with Virgin Group Holdings Limited
in relation to the brand. CYBG reserves the right to waive any or all of these pre-
conditions in whole or in part.

Any firm offer will also be subject to customary terms and conditions for a transaction
governed by the Code and the UK listing rules, including regulatory and CYBG shareholder
approval.

1 Based on the issuance of 509,812,684 new CYBG shares for Virgin Money’s 451,262,132
ordinary shares on a fully diluted basis (including 445,442,008 ordinary shares 
currently in issue and 5,820,124 ordinary shares to be issued on the exercise of
options or vesting of awards under Virgin Money’s share schemes), giving a pro forma
share count for the combined group of 1,394,964,277.

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