Nationwide Building Society is offering 220p per share in its acquisition of Virgin Money, comprising a 218p cash consideration and a 2p dividend.
The offer values Virgin Money at approximately £2.9 billion, representing a premium of 38% over the closing price on March 6, when Nationwide first announced the takeover.
Nationwide surprised the financial sector when it proposed the acquisition earlier this month, creating what will be the second-largest provider of mortgages and savings in the UK
Nationwide intends to rebrand Virgin Money over time, with arrangements made regarding the use of the ‘Virgin Money’ brand and discussions on a potential partnership involving the ‘Virgin Red’ loyalty programme.
The acquisition is expected to close in the fourth quarter of this year, subject to satisfying all conditions and approvals.
Debbie Crosbie, chief executive of Nationwide, said: "This acquisition strengthens Nationwide and means we can offer more value and broader services for our current and future members."
David Bennett, chairman of Virgin Money, added: "We're pleased to recommend the terms agreed with Nationwide, which deliver an attractive premium for our shareholders."
Richard Branson’s Virgin Group is set to get around £410 million for its 14.5% stake in the business.