The creation of a major banking sector challenger took a big step forward today as shareholders in Clydesdale-owner CYBG and Virgin Money overwhelmingly backed the pair’s proposed merger.
Three motions about the deal were put forward to CYBG shareholders, where more than 96 per cent of the votes were in favour of the recommended all-share offer for Virgin Money.
Virgin Money investors also voted in favour of the deal, with more than 99 per cent supporting it. However, some shareholders rebelled against a resolution giving Virgin Money’s chief executive, Jayne-Anne Gadhia, a £619,000 redundancy payout, on top of a termination payment of £1.1 million. She is also due to receive a bonus owed to her of £1m. The vote passed with some 87 per cent in favour.
The centuries-old Clydesdale Bank name is set to disappear from Scotland’s high streets following the takeover of Virgin Money in a £1.7 billion deal unveiled in June.
The enlarged operation will be headquartered in Glasgow and is seen as a potential competitor to established giants such as Barclays and RBS with a customer base of about six million.
Gadhia said: “I am delighted with the support from our shareholder base in approving the recommended all-share offer for Virgin Money by CYBG.
“Bringing together the complementary strengths of Virgin Money and CYBG will create the UK’s first true national competitor in UK banking, improving competition and choice for all UK consumers, while enabling the Virgin Money franchise to continue to flourish.”
CYBG said that engagement with financial regulators was ongoing. The banking duo remain confident that completion of the offer will occur in the closing quarter of 2018.
CYBG’s David Duffy is staying on as chief executive. The enlarged group will see CYBG’s Jim Pettigrew continue on as chairman alongside finance chief Ian Smith.
The firms said in June that they recognised “that there will be a loss of jobs” as a result of the takeover, likely to number about 1,500 over three years. The bulk of those cuts are likely to affect senior management positions, as CYBG has said there is “very little in overlap” in customer-facing roles.