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

Foxhouse

26left said

I didn't interpret Mikael’s statement that way. I don’t think he’s claiming to speak for *all* members, just the members that signed the petition and are requesting a SGM for a vote on the deal.

As others have pointed out in this thread previously, the law suggests a member vote *IS* legally required. See http://nationwide-virgin-money-member-vote.org.uk/bsa1986.html

Over a 1,000 people have read about, searched for and signed the petition. That’s quite a feat given limited resources and efforts of a motivated few, vs. the millions spent by Nationwide’s team thus far.

But you don't know that's what he meant (unless of course you've spoken with him), and I've quoted his exact words as per The Mirror, so the only logical take is mine. (Or unless he's been misquoted).

As to your point regarding the necessity for a member vote, I find it extremely hard to believe that the board and management of the world's largest building society have taken it upon themselves to not comply with their legal requirements, and pay no heed to Acts of Parliament (even if they'd like to).

I'd put £50 (of my own money, not someone else's) on it that all due diligence in terms of the process to secure the deal has taken place. Otherwise it runs a very real risk of not happening. If there's one thing I learnt when speaking to the new 'commercial world' intake into NBS in the late 2000s, they all have one thing in common; massive egos. The likes of Crosbie won't want this to fail, as that would have a detrimental effect on their next job hunt.

spider42

Foxhouse said:

26left said

I didn't interpret Mikael’s statement that way. I don’t think he’s claiming to speak for *all* members, just the members that signed the petition and are requesting a SGM for a vote on the deal.

As others have pointed out in this thread previously, the law suggests a member vote *IS* legally required. See http://nationwide-virgin-money-member-vote.org.uk/bsa1986.html

Over a 1,000 people have read about, searched for and signed the petition. That’s quite a feat given limited resources and efforts of a motivated few, vs. the millions spent by Nationwide’s team thus far.

As to your point regarding the necessity for a member vote, I find it extremely hard to believe that the board and management of the world's largest building society have taken it upon themselves to not comply with their legal requirements, and pay no heed to Acts of Parliament (even if they'd like to).

This has been covered already in this thread. Section 92A of the Building Societies Act 1986 sets out when a vote is required. It appears that these conditions are satisfied (only 40% of Virgin's income was from mortgage interest per its latest audited accounts, and it needs to be at least 50% to avoid a vote) and the price paid needs to be more than 15% of Nationwide's own funds (which it is).

But Section 92A also then goes on to say that if a vote is required, but one isn't held, then that doesn't invalidate the acquisition. So you could have the perverse situation where it is technically legal to acquire Virgin without holding a vote, whilst at the same time the law still mandates that a vote is necessary. There doesn't appear to be any sort of penalty or sanction for failing to hold a vote, even if the legislation requires one, and it essentially says you can carry on with the acquisition regardless.

But it is also possible that Nationwide's advisors believe that the tests in subsection 3 or 4 haven't been met, and that somehow Virgin's mortgage interest is more than half of its total income, despite its latest accounts showing otherwise. But as far as I'm aware, they've not explained their rationale at all.

26left

Foxhouse said:

26left said

I didn't interpret Mikael’s statement that way. I don’t think he’s claiming to speak for *all* members, just the members that signed the petition and are requesting a SGM for a vote on the deal.

As others have pointed out in this thread previously, the law suggests a member vote *IS* legally required. See http://nationwide-virgin-money-member-vote.org.uk/bsa1986.html

Over a 1,000 people have read about, searched for and signed the petition. That’s quite a feat given limited resources and efforts of a motivated few, vs. the millions spent by Nationwide’s team thus far.

But you don't know that's what he meant (unless of course you've spoken with him), and I've quoted his exact words as per The Mirror, so the only logical take is mine. (Or unless he's been misquoted).

As to your point regarding the necessity for a member vote, I find it extremely hard to believe that the board and management of the world's largest building society have taken it upon themselves to not comply with their legal requirements, and pay no heed to Acts of Parliament (even if they'd like to).

I'd put £50 (of my own money, not someone else's) on it that all due diligence in terms of the process to secure the deal has taken place. Otherwise it runs a very real risk of not happening. If there's one thing I learnt when speaking to the new 'commercial world' intake into NBS in the late 2000s, they all have one thing in common; massive egos. The likes of Crosbie won't want this to fail, as that would have a detrimental effect on their next job hunt.

I think the Mirror has presented the quote without the context of Mikael’s full statement, which you can find here:
http://nationwide-virgin-money-member-vote.org.uk/press.pdf

Mikael makes reference to members that have signed the petition, talks about those members throughout and then ends with a call to “all members”. 

Middle_of_the_Road

Seems this is far from a done deal.
Two worlds collide...
Nationwide members justifiably outranged at not being considered and the other side greedy for more of the spoils.

https://www.proactiveinvestors.co.uk/companies/news/1045277/reject-nationwide-takeover-kbw-implores-virgin-money-shareholders-1045277.html

PosterBoy77

Foxhouse said:

Mikael Armstrong (he behind the petition) quoted from Mirror website:

He added: "Nationwide members want and must be given a vote on the proposed takeover of Virgin Money. Denying the society's members, its own customers and owners, a vote on the deal is now an obscene show of arrogance."

I'm not arguing for or against this takeover, as I have no idea whether in the long run it's better for Nationwide's future. What I do know is that the board, under the rules/laws that relate to such matters, are under no obligation to offer the members a vote.

The reason I quote this is to highlight the hypocrisy that takes place in such situations. Armstrong accuses the Society of arrogance, but then claims to speak for me! 

So less than 1000 out of 16000000 (0.00625%) members backed the petition.

Don't know who he thinks he speaks for, but I'm a member of very long standing, and he doesn't speak for me.

Under the law there is an obligation to offer the members a vote. You don't know that there is no obligation to offer the members a vote. You just believe this to be the case and have accepted that.

Nonetheless the petition obviously only directly represents the members who have signed the petition. However more members are signing all the time, so whilst the numbers that have signed so far might be small in comparison to the total number of members, it does not itself mean that less than a thousand, now 1500 want to be given a say. There are undoubtedly many more who have not yet heard about the petition.

You are of course entitled to be happy with not having a vote. Nobody is claiming that every Nationwide member wants a vote, just that there are undoubtedly many who do.

WillPS

Middle_of_the_Road said:

Seems this is far from a done deal.
Two worlds collide...
Nationwide members justifiably outranged at not being considered and the other side greedy for more of the spoils.

https://www.proactiveinvestors.co.uk/companies/news/1045277/reject-nationwide-takeover-kbw-implores-virgin-money-shareholders-1045277.html

Unless I've misread, this analysis is saying that Virgin Money shareholders should reject the deal on the grounds Nationwide aren't paying enough. This is *the opposite* of the argument being made by the naysayers on this thread...

WillPS

Mutuo, who I'd never heard of but apparently are "the UK's leading advocate for building societies and co-ops", and played a hand in stopping the buyout of LV a few years ago, are in favour.

https://www.thisismoney.co.uk/money/markets/article-13307265/Nationwide-bid-Virgin-Money-wins-support-Mutuo-influential-lobby-group-mutuals.html

Middle_of_the_Road

WillPS said:

Middle_of_the_Road said:

Seems this is far from a done deal.
Two worlds collide...
Nationwide members justifiably outranged at not being considered and the other side greedy for more of the spoils.

https://www.proactiveinvestors.co.uk/companies/news/1045277/reject-nationwide-takeover-kbw-implores-virgin-money-shareholders-1045277.html

Unless I've misread, this analysis is saying that Virgin Money shareholders should reject the deal on the grounds Nationwide aren't paying enough. This is *the opposite* of the argument being made by the naysayers on this thread...

So, they're suggesting Virgin shareholders should expect more. Meanwhile some Nationwide members think the offer is high already..... how strange🙂

Section62

Middle_of_the_Road said:

WillPS said:

Middle_of_the_Road said:

Seems this is far from a done deal.
Two worlds collide...
Nationwide members justifiably outranged at not being considered and the other side greedy for more of the spoils.

https://www.proactiveinvestors.co.uk/companies/news/1045277/reject-nationwide-takeover-kbw-implores-virgin-money-shareholders-1045277.html

Unless I've misread, this analysis is saying that Virgin Money shareholders should reject the deal on the grounds Nationwide aren't paying enough. This is *the opposite* of the argument being made by the naysayers on this thread...

So, they're suggesting Virgin shareholders should expect more. Meanwhile some Nationwide members think the offer is high already..... how strange🙂

Not strange at all really.  Different people/organisations will have different ideas of what something is worth, it makes a difference whether you are the buyer or the seller, and also how desperate you are to buy.  The question I'd put to the Board is whether £2.9 billion would be enough to organically grow the business by the same amount vs buying the market share 'off the peg'. Organic growth would come without the legacy issues VM/CYBG bring with them. Other possible buyers may not value the cost of the legacy issues in the same way because they wouldn't be able to achive the same outcome through organic growth and therefore the legacy issues could be a price worth paying.

Ultimately, the most important question might be why - if Nationwide is getting such an excellent deal at a bargain price - has there been no better offer submitted for VM by someone else?  Is it because the Nationwide Board are so super-clever they have spotted a great deal which everyone else (banks, wealth funds, billionaires, etc) have failed to spot or don't understand?

I'd also make the point there is no homogeneous group of "naysayers" on the board who all believe the same thing.  The arguments being made by forum members with doubts about the wisdom of the deal are far more nuanced and diverse than that, and some have said nothing about the VfM of the deal, concentrating solely on the democratic and accountability issues instead.

EarthBoy

Middle_of_the_Road said:

WillPS said:

Middle_of_the_Road said:

Seems this is far from a done deal.
Two worlds collide...
Nationwide members justifiably outranged at not being considered and the other side greedy for more of the spoils.

https://www.proactiveinvestors.co.uk/companies/news/1045277/reject-nationwide-takeover-kbw-implores-virgin-money-shareholders-1045277.html

Unless I've misread, this analysis is saying that Virgin Money shareholders should reject the deal on the grounds Nationwide aren't paying enough. This is *the opposite* of the argument being made by the naysayers on this thread...

So, they're suggesting Virgin shareholders should expect more. Meanwhile some Nationwide members think the offer is high already..... how strange🙂

Sellers of anything want the highest price that the buyer will pay, and buyers always want to pay the least that the sellers will accept.