Yahoo Finance Nationwide boss sold £150,000 shares in Virgin Money before bid
Nationwide Building Society chief executive Debbie Crosbie sold £150,000 worth of shares in Virgin Money before she launched a £2.9 billion takeover bid for the business.
She did so well before the bid in March, selling 90,000 shares in two tranches in July 2023 and November 2023.
But she sold at well below the price she is asking Nationwide members to stump up for VM.
On average, she got 170p a share for stock in Virgin, where she previously worked. She, with the advice of bankers at UBS, is offering 220p a share for the business in a deal that sees Sir Richard Branson’s Virgin Group net £600 million.
Some in the City are asking why she thinks Virgin Money is worth so much more than the price at which she cashed out.
Bankers and advisers are expected to pocket £80 million in fees for getting the deal done. Nationwide’s 16 million members are denied a vote, so far, but a campaign group is agitating to be given a say.
They fear that this unusual acquisition of a building society buying a listed bank, will dilute Nationwide’s financial strength.
Critics have dubbed Virgin Money a “Frankenstein bank”, since it is stitched together from the old Clydesdale Bank, Yorkshire Bank and parts of the collapsed Northern Rock.
Crosbie was at Clydesdale but was passed over to become CEO at Virgin Money by David Duffy, who will get £15 million for his shares if the deal goes through.
Crosbie’s move to Nationwide made her the highest paid building society boss in history, taking home £3.5 million in just her first ten months at Nationwide: £1.1 million in basic salary, £0.7 million in bonuses and a £1.7 million payment to compensate her for what she forfeited when she left her previous employer, TSB.
Mikael Armstrong, who is leading the campaign for members, is asking why she sold her Virgin shares. He said: “Did she think that her stockholding might be seen as a conflict of interest? Did she put them in trust instead? Or did she think the share price was topping out - despite deciding last month that they’re now worth £2.20 per share, albeit using Nationwide members' equity to buy them? Whatever the answer, no surprise Nationwide members are calling for more transparency and a member vote on the proposed deal.”
Nationwide said: “Nationwide’s Board believes that this deal is in the best interest of current and future members. Buying Virgin Money will make Nationwide a stronger building society ensuring it can offer better mortgages and savings rates compared to the market average and will expand its products and services to include business banking and a range of other benefits to its members.”
Separately, Nationwide today said it would stop granting mortgages on some properties where there is a high risk of flooding.
It said this would affect “a very limited” number of homes.
