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Virgin Money Holdings proceeds with IPO

Thursday 9th October 2014

Last week Virgin Money Holdings announced its intention to proceed with an initial public offering (IPO). 
The challenger bank intends to raise 150 million pounds from a stock market listing - it will pay 50 million pounds to the UK Treasury under the terms of its purchase of nationalised lender Northern Rock in 2011.
Other winners from the IPO will be almost 3,000 Virgin Money staff and entrepreneur Richard Branson will share a multi-million pound windfall when the bank lists in London.
Analysts have estimated that Virgin Money will be valued at between £1.5 billion and £2 billion, which could leave Branson’s potential stake at almost £1 billion.
The float will comprise an offer of ordinary shares to certain institutional investors in the United Kingdom and elsewhere outside the United States. As such, it has been reported that private UK investors won’t be able to participate in this issue at launch.
Virgin Money Chief Executive Jayne-Ann Gadhia, who will become the first woman to head a publicly listed UK bank, confirmed that the firm had always planned to list within three years of the Northern Rock agreement.
"This is part of the natural evolution of the company and one we're very pleased to be taking," she told Reuters news agency.
Commenting on the move, Richard Hunter, Head of Equities at Hargreaves Lansdown said: “It is disappointing that Virgin have chosen to exclude private investors, particularly given the ubiquity of its brand and the nature of its business. 
“Nonetheless, it is an uncomfortable truth that, given the relatively small amount being raised, in terms of convenience and speed to market this may be the prudent financial choice for Virgin Money,” he added.

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