The deal, which will eventually see the Virgin Money brand disappear gradually over six years, will also pave the way for the creation of one of the UK’s largest mortgage and savings groups. 

Under the terms of the deal, Nationwide tabled a 220p-a-share approach for Virgin Money, which includes a planned 2p-per-share dividend payout. This offer represents a substantial 38% increase over Virgin Money’s closing share price on Wednesday.

The combined entity now boasts a market value of around £366.3bn, with total lending and advances reaching approximately £283.5bn.

“Importantly, Nationwide will remain a building society, and a combined group would bring the benefits of fairer banking and mutual ownership to more people in the UK, including our continuing commitment to retain existing branches, as part of our ‘Branch Promise’ and leading levels of customer service,” said Nationwide chief executive Debbie Crosbie according to Insider.

“We believe the combination would create a stronger and more diverse business that will be better placed to deliver value to our members and customers, both now and in the future.”

In a statement, Nationwide emphasised its commitment to preserving Virgin Money’s workforce of 7,300 employees in the near term, signalling continuity for the banking group’s operations. Additionally, Nationwide reiterated its status as a mutual building society, underscoring its dedication to customer-centric values and community-oriented banking.

“This potential transaction with Nationwide represents an exciting opportunity to build on the significant progress we have made in becoming the only new Tier 1 bank in recent history,” said David Duffy, chief executive of Virgin Money.

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“The combined scale and strength would expand our customer offering and complete our journey in the banking sector as a national competitor.”

If the deal goes on it would be the biggest UK bank takeover since the 2008 financial crisis, which led to the nationalisation of Northern Rock bank, and eventually was then bought by Virgin Money in 2012.

Virgin Money, formerly known as CYBG, underwent a transformative rebranding following its £1.6 billion acquisition of Sir Richard Branson’s banking group in 2018. The evolution of the company underscores the dynamic nature of the financial services industry, with Virgin Money poised to leverage its partnership with Nationwide to further expand its market presence.