Virgin Money UK PLC (LSE:VMUK)’s trading update next week will be overshadowed by the agreed takeover from building society Nationwide.
A surprise at the time, the reaction since has been mixed with members of the society furious that they won’t be able to vote on the deal, while some analysts, notably KBW, suggest the offer is too low.
KBW acknowledged the 38% premium to Virgin Money’s valuation but added that it’s only an 11% premium to analysts’ pre-bid consensus target price.
Analysts at the Stifel subsidiary suggested a 250p per share valuation on Virgin Money is not unreasonable, compared to the 218p (£2.8 billion) offer tabled by Nationwide.
Shares in Virgin have flatlined at around 215p since the offer was made, which suggests the market thinks the bid is fair and all but done and dusted.
A trading update from VMUK in April pointed to growth in relationship deposits and target lending segments, a broadly stable net interest margin, cost inflation partially offset by efficiency initiatives and unchanged trends in credit quality.