VOTE now! Proposed take over of Virgin Money - Nationwide members should be given a vote

gravel_2

eskbanker said:

gravel_2 said:

PosterBoy77 said:

eskbanker said:

Surely the question here isn't whether the IT integration would be risky and expensive, but by how much (if any) would it be more risky and expensive than the NW board understands, based on what will presumably be detailed and informed analysis?

The documents they have issued admit that they have not yet carried out any detailed work on how they will integrate the businesses or what will be involved. They plan to setup a group to look into the details after the purchase.

It therefore does not look like any detailed and informed analysis has been carried out at this stage.

There is a limit to what can actually be explored as part of confidential M&A discussions vs what can be known after you've actually bought the target. Remember that until the acquisition goes ahead NW and VM are competitors and, to a certain extent, have to continue to act as such.

It's entirely believable that they haven't been able to carry out detailed analysis but it would be surprising (and negligent) if they had not conducted ordinary due diligence on this topic. 

Yes, obviously there'd be significantly more detail available post-acquisition, but the point is that before, during and after the VM/NW discussions thus far, there'll have been a lot more information available to the bidder than to Joe Public, i.e. the NW board will be much better informed than anyone posting on here, except perhaps any who happen to be senior VM insiders.

I think we're singing from the same sheet.

eskbanker

PosterBoy77 said:

eskbanker said:

gravel_2 said:

PosterBoy77 said:

eskbanker said:

Surely the question here isn't whether the IT integration would be risky and expensive, but by how much (if any) would it be more risky and expensive than the NW board understands, based on what will presumably be detailed and informed analysis?

The documents they have issued admit that they have not yet carried out any detailed work on how they will integrate the businesses or what will be involved. They plan to setup a group to look into the details after the purchase.

It therefore does not look like any detailed and informed analysis has been carried out at this stage.

There is a limit to what can actually be explored as part of confidential M&A discussions vs what can be known after you've actually bought the target. Remember that until the acquisition goes ahead NW and VM are competitors and, to a certain extent, have to continue to act as such.

It's entirely believable that they haven't been able to carry out detailed analysis but it would be surprising (and negligent) if they had not conducted ordinary due diligence on this topic. 

Yes, obviously there'd be significantly more detail available post-acquisition, but the point is that before, during and after the VM/NW discussions thus far, there'll have been a lot more information available to the bidder than to Joe Public, i.e. the NW board will be much better informed than anyone posting on here, except perhaps any who happen to be senior VM insiders.

You might think so, but I don't agree. I have a background in IT and senior management making acquisitions of companies normally don't concern themselves much with these details as it could get in the way of the bigger picture. They will expect others to just wave a magic wand to fix things later.

While there's no doubt that there will be such scenarios where deals are pushed through without adequate recognition of IT integration challenges, in this case these are (a) pivotal to the purchase to the extent of being fundamental to its success and (b) well-known in the public domain (it's hardly a secret that VM's business remains fragmented), so it really doesn't seem to me that there's any justification in the posts along the lines of 'aha! I bet they haven't thought of that'....

26left

eskbanker said:

PosterBoy77 said:

eskbanker said:

gravel_2 said:

PosterBoy77 said:

eskbanker said:

Surely the question here isn't whether the IT integration would be risky and expensive, but by how much (if any) would it be more risky and expensive than the NW board understands, based on what will presumably be detailed and informed analysis?

The documents they have issued admit that they have not yet carried out any detailed work on how they will integrate the businesses or what will be involved. They plan to setup a group to look into the details after the purchase.

It therefore does not look like any detailed and informed analysis has been carried out at this stage.

There is a limit to what can actually be explored as part of confidential M&A discussions vs what can be known after you've actually bought the target. Remember that until the acquisition goes ahead NW and VM are competitors and, to a certain extent, have to continue to act as such.

It's entirely believable that they haven't been able to carry out detailed analysis but it would be surprising (and negligent) if they had not conducted ordinary due diligence on this topic. 

Yes, obviously there'd be significantly more detail available post-acquisition, but the point is that before, during and after the VM/NW discussions thus far, there'll have been a lot more information available to the bidder than to Joe Public, i.e. the NW board will be much better informed than anyone posting on here, except perhaps any who happen to be senior VM insiders.

You might think so, but I don't agree. I have a background in IT and senior management making acquisitions of companies normally don't concern themselves much with these details as it could get in the way of the bigger picture. They will expect others to just wave a magic wand to fix things later.

While there's no doubt that there will be such scenarios where deals are pushed through without adequate recognition of IT integration challenges, in this case these are (a) pivotal to the purchase to the extent of being fundamental to its success and (b) well-known in the public domain (it's hardly a secret that VM's business remains fragmented), so it really doesn't seem to me that there's any justification in the posts along the lines of 'aha! I bet they haven't thought of that'....

I don’t think anyone suggesting that management aren’t aware of these challenges. It’s that they’re not being transparent about it with members and giving them the chance to vote. Effectively this could be a costly transaction twice over - billions to buy VM, and billions again to restructure and integrate VM. There’s no transparency as to how dilutive this will be, how it will be financed, and how much weaker Nationwide would be if it goes ahead. 

eskbanker

26left said:

eskbanker said:

PosterBoy77 said:

eskbanker said:

gravel_2 said:

PosterBoy77 said:

eskbanker said:

Surely the question here isn't whether the IT integration would be risky and expensive, but by how much (if any) would it be more risky and expensive than the NW board understands, based on what will presumably be detailed and informed analysis?

The documents they have issued admit that they have not yet carried out any detailed work on how they will integrate the businesses or what will be involved. They plan to setup a group to look into the details after the purchase.

It therefore does not look like any detailed and informed analysis has been carried out at this stage.

There is a limit to what can actually be explored as part of confidential M&A discussions vs what can be known after you've actually bought the target. Remember that until the acquisition goes ahead NW and VM are competitors and, to a certain extent, have to continue to act as such.

It's entirely believable that they haven't been able to carry out detailed analysis but it would be surprising (and negligent) if they had not conducted ordinary due diligence on this topic. 

Yes, obviously there'd be significantly more detail available post-acquisition, but the point is that before, during and after the VM/NW discussions thus far, there'll have been a lot more information available to the bidder than to Joe Public, i.e. the NW board will be much better informed than anyone posting on here, except perhaps any who happen to be senior VM insiders.

You might think so, but I don't agree. I have a background in IT and senior management making acquisitions of companies normally don't concern themselves much with these details as it could get in the way of the bigger picture. They will expect others to just wave a magic wand to fix things later.

While there's no doubt that there will be such scenarios where deals are pushed through without adequate recognition of IT integration challenges, in this case these are (a) pivotal to the purchase to the extent of being fundamental to its success and (b) well-known in the public domain (it's hardly a secret that VM's business remains fragmented), so it really doesn't seem to me that there's any justification in the posts along the lines of 'aha! I bet they haven't thought of that'....

I don’t think anyone suggesting that management aren’t aware of these challenges. It’s that they’re not being transparent about it with members and giving them the chance to vote. Effectively this could be a costly transaction twice over - billions to buy VM, and billions again to restructure and integrate VM. There’s no transparency as to how dilutive this will be, how it will be financed, and how much weaker Nationwide would be if it goes ahead. 

My post quoted at the start of this exchange was in response to a number of posts yesterday afternoon in which the tone seemed to be that NW management don't understand what they're getting into - the transparency issue of how (or if) this is shared with members is a separate one IMHO.

Section62

eskbanker said:

26left said:

eskbanker said:

PosterBoy77 said:

I don’t think anyone suggesting that management aren’t aware of these challenges. It’s that they’re not being transparent about it with members and giving them the chance to vote. Effectively this could be a costly transaction twice over - billions to buy VM, and billions again to restructure and integrate VM. There’s no transparency as to how dilutive this will be, how it will be financed, and how much weaker Nationwide would be if it goes ahead. 

My post quoted at the start of this exchange was in response to a number of posts yesterday afternoon in which the tone seemed to be that NW management don't understand what they're getting into - the transparency issue of how (or if) this is shared with members is a separate one IMHO.

With the lack of transparency and consequent absence of information, it ultimately comes down to trust.  Each member is left to make their own judgement whether the current senior management team can be trusted to get things right.

Personally, when the SMT greenlight an advetising campaign, the first TV advert of which ends up being banned for being misleading, my view is that they need to do a whole lot more to convince me they are the right people to be trusted to do the job.

https://www.bbc.co.uk/news/business-68711510

Did NW management know what they were getting into when they signed off spending a not inconsiderable amount of member's money on an advert which got banned for being misleading?  And yes, 'it is a different thing' - but if you can't get basics and smaller stuff right then I think it is fair to question some of the bigger stuff.

WillPS

Section62 said:

eskbanker said:

26left said:

eskbanker said:

PosterBoy77 said:

I don’t think anyone suggesting that management aren’t aware of these challenges. It’s that they’re not being transparent about it with members and giving them the chance to vote. Effectively this could be a costly transaction twice over - billions to buy VM, and billions again to restructure and integrate VM. There’s no transparency as to how dilutive this will be, how it will be financed, and how much weaker Nationwide would be if it goes ahead. 

My post quoted at the start of this exchange was in response to a number of posts yesterday afternoon in which the tone seemed to be that NW management don't understand what they're getting into - the transparency issue of how (or if) this is shared with members is a separate one IMHO.

With the lack of transparency and consequent absence of information, it ultimately comes down to trust.  Each member is left to make their own judgement whether the current senior management team can be trusted to get things right.

Personally, when the SMT greenlight an advetising campaign, the first TV advert of which ends up being banned for being misleading, my view is that they need to do a whole lot more to convince me they are the right people to be trusted to do the job.

https://www.bbc.co.uk/news/business-68711510

Did NW management know what they were getting into when they signed off spending a not inconsiderable amount of member's money on an advert which got banned for being misleading?  And yes, 'it is a different thing' - but if you can't get basics and smaller stuff right then I think it is fair to question some of the bigger stuff.

It's not just a different thing, it's a totally different thing. 

Who's to say that flirting with the edge and gaining a bit of extra publicity as a result wasn't part of the plan? If so, it's worked.

In any case there's an AGM vote on the board's remuneration every year, if you're not happy you know how to vote (and probably you know exactly how little difference it'll make).

Oh I'm about to be all cynical again - it wouldn't be, perhaps, that you're determined to paint a negative picture of the society and its management regardless of what they do; would it?

Millyonare

eskbanker said:

PosterBoy77 said:

eskbanker said:

gravel_2 said:

PosterBoy77 said:

eskbanker said:

Surely the question here isn't whether the IT integration would be risky and expensive, but by how much (if any) would it be more risky and expensive than the NW board understands, based on what will presumably be detailed and informed analysis?

The documents they have issued admit that they have not yet carried out any detailed work on how they will integrate the businesses or what will be involved. They plan to setup a group to look into the details after the purchase.

It therefore does not look like any detailed and informed analysis has been carried out at this stage.

There is a limit to what can actually be explored as part of confidential M&A discussions vs what can be known after you've actually bought the target. Remember that until the acquisition goes ahead NW and VM are competitors and, to a certain extent, have to continue to act as such.

It's entirely believable that they haven't been able to carry out detailed analysis but it would be surprising (and negligent) if they had not conducted ordinary due diligence on this topic. 

Yes, obviously there'd be significantly more detail available post-acquisition, but the point is that before, during and after the VM/NW discussions thus far, there'll have been a lot more information available to the bidder than to Joe Public, i.e. the NW board will be much better informed than anyone posting on here, except perhaps any who happen to be senior VM insiders.

You might think so, but I don't agree. I have a background in IT and senior management making acquisitions of companies normally don't concern themselves much with these details as it could get in the way of the bigger picture. They will expect others to just wave a magic wand to fix things later.

While there's no doubt that there will be such scenarios where deals are pushed through without adequate recognition of IT integration challenges, in this case these are (a) pivotal to the purchase to the extent of being fundamental to its success and (b) well-known in the public domain (it's hardly a secret that VM's business remains fragmented), so it really doesn't seem to me that there's any justification in the posts along the lines of 'aha! I bet they haven't thought of that'....

Around 70-90% of all mergers worldwide fail. The no.1 cause is overpaying. The no.2 cause is IT and cultural integration. Even something as simple as firm A is on Teams, and firm B is on Zoom, it causes months of chaos.

Nationwide have overpaid for VM (very high PE ratio). And they don't seem to have a handle on IT integration (different legacy systems).

At this point, the Virgin Money omens are not good...

eskbanker

Millyonare said:
And they don't seem to have a handle on IT integration (different legacy systems).

But on what basis are you and others concluding this, and contending that you know better?  Of course their offer documents refer to the need to conduct the integration projects, which will start by developing and refining understanding from what can be determined prior to offering, but in itself that doesn't support the apparent assertions that they don't know what they're doing?

Millyonare

eskbanker said:

Millyonare said:
And they don't seem to have a handle on IT integration (different legacy systems).

But on what basis are you and others concluding this, and contending that you know better?  Of course their offer documents refer to the need to conduct the integration projects, which will start by developing and refining understanding from what can be determined prior to offering, but in itself that doesn't support the apparent assertions that they don't know what they're doing?

Plenty of IT experts in the industry press quoted as saying VM's IT systems are a mess. Nationwide will spend years and years unravelling the digital spaghetti -- and then knitting it all back together again.

It's a high price paid for a struggling second-tier bank with a sprawling mish-mash of struggling legacy brands and legacy IT systems.

As the old saying goes... an eagle plus a turkey doesn't make an eagle 😉

https://www.computerweekly.com/news/366573297/Nationwide-IT-infrastructure-poised-to-absorb-Virgin-Money

https://www.ft.com/content/2aff65fe-d435-4520-bfbb-d5e086a56543

callum9999

WillPS said:

Section62 said:

eskbanker said:

26left said:

eskbanker said:

PosterBoy77 said:

I don’t think anyone suggesting that management aren’t aware of these challenges. It’s that they’re not being transparent about it with members and giving them the chance to vote. Effectively this could be a costly transaction twice over - billions to buy VM, and billions again to restructure and integrate VM. There’s no transparency as to how dilutive this will be, how it will be financed, and how much weaker Nationwide would be if it goes ahead. 

My post quoted at the start of this exchange was in response to a number of posts yesterday afternoon in which the tone seemed to be that NW management don't understand what they're getting into - the transparency issue of how (or if) this is shared with members is a separate one IMHO.

With the lack of transparency and consequent absence of information, it ultimately comes down to trust.  Each member is left to make their own judgement whether the current senior management team can be trusted to get things right.

Personally, when the SMT greenlight an advetising campaign, the first TV advert of which ends up being banned for being misleading, my view is that they need to do a whole lot more to convince me they are the right people to be trusted to do the job.

https://www.bbc.co.uk/news/business-68711510

Did NW management know what they were getting into when they signed off spending a not inconsiderable amount of member's money on an advert which got banned for being misleading?  And yes, 'it is a different thing' - but if you can't get basics and smaller stuff right then I think it is fair to question some of the bigger stuff.

It's not just a different thing, it's a totally different thing. 

Who's to say that flirting with the edge and gaining a bit of extra publicity as a result wasn't part of the plan? If so, it's worked.

In any case there's an AGM vote on the board's remuneration every year, if you're not happy you know how to vote (and probably you know exactly how little difference it'll make).

Oh I'm about to be all cynical again - it wouldn't be, perhaps, that you're determined to paint a negative picture of the society and its management regardless of what they do; would it?

I think it's beyond ridiculous to suggest that Nationwide planned for the ASA to publicly call them liars and emphasise through the mainstream media that they have been closing branches at a not dissimilar rate to their competitors, when the entire point of the campaign was to publicise their branch commitment...

I agree it has nothing to do with this merger, but trying to justify it makes your impartiality look pretty poor (making your last line pretty amusing!).