Analysts launched a broadside at Virgin Money UK PLC's (LSE:VMUK) management after the board formally accepted Nationwide Building Society’s takeover offer.
Both parties have agreed to Nationwide’s 220p-per-share offer that values Virgin Money at £2.9 billion.
Shore Capital analysts noted that this places a 0.65 times value against Virgin Money’s tangible net asset value (TNAV) of 337p per share (as of 31 December 2023).
“By accepting such a low valuation multiple, we think the board of VMUK must have had little faith in its management team to execute on its strategic plan and ultimately deliver a double-digit return on equity and so a higher rating,” said Shore Cap analyst Gary Greenwood.
Russ Mould, investment director at AJ Bell, said: “After the miserable performance of Virgin Money on the market, shareholders might welcome the chance to get out at a small premium.
“You can never rule out someone else throwing their hat into the ring, but Nationwide is looking fairly comfortable for now with getting its offer over the line.”