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

Section62

26left said:

There was some press coverage for the petition overnight: 
https://www.thisismoney.co.uk/money/markets/article-13278655/Petition-calling-Nationwide-members-say-takeover-Virgin-Money-track-hit-target-needed-call-special-meeting.html

"Experts say the 500 signature rule, which was introduced long before social media was invented, is a low bar."

I'd be interested to know who these "Experts" are and whether they have read the Memorandum and Rules to understand what is actually needed to trigger a meeting.  (Hint: Much more than just 500 people signing a 'social media' petition).

Money_Grabber13579

26left said:

masonic said:

Did Mikael have any view about the requirement to be a two year qualifying member, meaning that they must have held either a share account or a mortgage for two years? This requirement excludes me for example as I only hold savings with Nationwide.

Also, if the process is started today, then it must be completed by 6th July, but in 14(d)(ii), such a request will be denied if the meeting would need to fall between 5th May - 4th September.

The template email demands a meeting before 19th April.

 
Have you checked your account T&Cs? I think most savings and current accounts (i.e. deposit accounts) are classed as a “share investment” under the rules?  I think that would mean you DO qualify, provided you maintained a balance of £100 or more?

@Section62 on a different thread:

https://forums.moneysavingexpert.com/discussion/comment/80160496/#Comment_80160496

A "Share Investment" is defined as such by the T&C's of the account.  Some Nationwide savings accounts are share accounts, some are not.

Therefore if you have an account which is defined as a share account in the T&Cs you are an "Investing Member" and therefore a "Member", and if you meet the further conditions you can be a "Qualified Voting Member".

Nationwide's 'shareholders' are those members holding a "Share Investment", which in general will be individuals with a balance in an account defined as a "Share Investment".

I’m not sure that a meeting before 19th April would be possible? To me, this reads that at least 21 days notice of a meeting would have to be given to eligible members (presumably the last date for the receipt of proxies would be the day of the meeting).

masonic

Money_Grabber13579 said:

26left said:

masonic said:

Did Mikael have any view about the requirement to be a two year qualifying member, meaning that they must have held either a share account or a mortgage for two years? This requirement excludes me for example as I only hold savings with Nationwide.

Also, if the process is started today, then it must be completed by 6th July, but in 14(d)(ii), such a request will be denied if the meeting would need to fall between 5th May - 4th September.

The template email demands a meeting before 19th April.

 
Have you checked your account T&Cs? I think most savings and current accounts (i.e. deposit accounts) are classed as a “share investment” under the rules?  I think that would mean you DO qualify, provided you maintained a balance of £100 or more?

@Section62 on a different thread:

https://forums.moneysavingexpert.com/discussion/comment/80160496/#Comment_80160496

A "Share Investment" is defined as such by the T&C's of the account.  Some Nationwide savings accounts are share accounts, some are not.

Therefore if you have an account which is defined as a share account in the T&Cs you are an "Investing Member" and therefore a "Member", and if you meet the further conditions you can be a "Qualified Voting Member".

Nationwide's 'shareholders' are those members holding a "Share Investment", which in general will be individuals with a balance in an account defined as a "Share Investment".

I’m not sure that a meeting before 19th April would be possible? To me, this reads that at least 21 days notice of a meeting would have to be given to eligible members (presumably the last date for the receipt of proxies would be the day of the meeting).

Quite right, https://forums.moneysavingexpert.com/discussion/comment/80708693/#Comment_80708693

Money_Grabber13579

If Nationwide were a company with shareholders, would they have been given a vote on the acquisition? I know it is common place for the shareholders of the target (virgin in this case) to be given a vote as it involves them selling their shares and exiting the business but I’m not sure that shareholders of the acquiring company would usually get a vote?

I hear of deals collapsing because the shareholders of the target vote it down but not because the shareholders of the acquiring company have rejected it (as in, I’m not aware that they are typically given a vote, unless it is a merger rather than a takeover). It’s not something I know a huge amount about though.

spider42

Money_Grabber13579 said:

If Nationwide were a company with shareholders, would they have been given a vote on the acquisition? I know it is common place for the shareholders of the target (virgin in this case) to be given a vote as it involves them selling their shares and exiting the business but I’m not sure that shareholders of the acquiring company would usually get a vote?

I hear of deals collapsing because the shareholders of the target vote it down but not because the shareholders of the acquiring company have rejected it (as in, I’m not aware that they are typically given a vote, unless it is a merger rather than a takeover). It’s not something I know a huge amount about though.

Excellent question! I've just checked the listing rules, and yes in my opinion, if Nationwide was listed, then its shareholders would have been required to vote on the Virgin acquisition.

Transactions are broken into Class 1 and Class 2 transactions. Shareholders need to approve Class 1 transactions, but not Class 2 transactions. The Class is determined by looking at the "percentage ratios". If any of the percentage ratios are over 25%, then it is a Class 1 transaction. If any is more than 5%, but all are less than 25%, then it is Class 2.

The ratios tested are:

• Gross assets
• Profits
• Consideration
• Gross capital

Virgin's gross assets at 30/9/23 were £91.8 billion (latest annual accounts). Nationwide's gross assets at 30/9/23 (most recent interim accounts) were £274.5 billion.

The gross assets ratio is therefore 33.4%. A listed company would therefore have required shareholder approval for a transaction of that size.

Rules are here: https://www.handbook.fca.org.uk/handbook/LR/10.pdf

Foxhouse

Money_Grabber13579 said:

If Nationwide were a company with shareholders, would they have been given a vote on the acquisition?

Sorry to sound blunt, but that question is totally irrelevant in this situation, and nothing more than a distraction.

Horses for courses, and all that.

Section62

Money_Grabber13579 said:

I hear of deals collapsing because the shareholders of the target vote it down but not because the shareholders of the acquiring company have rejected it (as in, I’m not aware that they are typically given a vote, unless it is a merger rather than a takeover). It’s not something I know a huge amount about though.

Even if a shareholder vote is not required/normal, the shareholders can always call an extraordinary meeting.

I'd suggest that the lack of examples where a vote was lost would probably be, at least in part, because the directors of the acquiring company wouldn't take something to a shareholder vote if there was any realistic prospect of losing it.  That would be a resigning issue and really take the shine off a glittering career.  Any thought of a deal would be dropped as soon as it was clear the acquiring company shareholders didn't want it.

This highlights one of the differences between a PLC and a mutual.  The directors of a PLC won't pursue a deal if 'soundings' are that their shareholders won't agree to it.  The PLC shareholders will include corporate shareholders able to employ their own analysts looking in depth at the merits of the deal so those soundings would be backed by something substantive.

In the Nationwide mutual model each shareholder is on their own, most of them without the resources (and possibly interest) to actively assess whether the deal is good or not.  Mutuality encourages trust in the SMT and Board to know best and do the right thing.  And the Memorandum and Rules make it virtually impossible for individual members to query the actions of the SMT and Board in any meaningful way.

Nationwide are suggesting they have now taken some form of 'soundings' from members - yet the lack of transparency means we have no way of knowing how many members were involved and how they were chosen.  Meanwhile the Connect site which is a ready made platform for Nationwide to get a snapshot of member opinion is totally underutilised. Maybe that's because Nationwide fear the response members would give wouldn't be what the SMT want to hear?

WillPS

Section62 said:

Nationwide are suggesting they have now taken some form of 'soundings' from members - yet the lack of transparency means we have no way of knowing how many members were involved and how they were chosen.  Meanwhile the Connect site which is a ready made platform for Nationwide to get a snapshot of member opinion is totally underutilised. Maybe that's because Nationwide fear the response members would give wouldn't be what the SMT want to hear?

More likely because nobody there is under NDA and all comments on there could be picked up and reported upon. While not totally public it's not exactly hard to gain access to it.

Also the Connect portal is not a useful cross-section of Members, IMHO, in the same way these boards aren't either.

WillPS

Section62 said:

The folk on these threads who have been taunting other forum members who are trying to make a difference are doing a disservice to Nationwide. If they are now gleeful at the prospect of being able to vote to ensure the 500 lose their deposits then it just shows their lack of understanding about what mutuality is about.  We've had clear examples of folk simply not understanding how the mutual model works and what it means to own a share of a mutual building society.  Maybe Nationwide should use some of their excess profits and advertising space to explain the mutual model, rather than to misleading claim to be better than the other banks?  I.e. Walk the walk.

Or they'd want the business to remain mutual and want to deny carpetbaggers the oxygen of further futile "democratic opportunities" unless they're willing to waste their time at their own expense.

I wonder why and how that stipulation was added? Could it possibly be that it was added as a result of a democratic vote of members at an AGM to prevent exactly this sort of behaviour, at the height of entryism by self-entitled actors in the 90s? Just a wild guess.

All academic anyway as this whole attempt has been bodged. Perhaps we should divert our collective energy in to the board pay report vote at the AGM? I've decided I am going to vote this year. I can't be content with being passive when there are clearly other members who wish to undermine the society and are going to great lengths to assert themselves under the cloak of "democracy" (albeit failing at the admin to give any of it half a chance of sticking).

26left

Section62 said:

Nationwide are suggesting they have now taken some form of 'soundings' from members - yet the lack of transparency means we have no way of knowing how many members were involved and how they were chosen. 

Totally agree - I think I recall one article referencing a management poll of just 150 people. But the sampling, questions posed and answers given were not shared. Depending on who you choose, what and how you ask it -  you can engineer the answer you want.