Free shares for staff as Virgin Money floats at £1.25bn
The placing of 25% of the company’s shares at 283p triggers a cash windfall for 2,800 staff who will be offered free shares worth £1,000 each.
It will raise £150 million for Virgin which will invest the proceeds in expansion and in making a £50m final payment to the government in connection with the acquisition of Northern Rock.
However, the re-pricing of the shares at the bottom of the revised scale reflects a continued tightening of the market and the appetite for new share issues which was blamed for delaying the flotation last month.
Private investors will have a chance to trade in the shares fully when the unconditional dealings begin next Tuesday.
The flotation of 25% of the stock has given Scotland another listed company as Virgin Money is co-headquartered in Edinburgh and Newcastle. The Edinburgh office is the former Scottish Equitable and latterly Scottish & Newcastle head office in St Andrew Square.
Jayne-Anne Gadhia, chief executive, said: “Our capability to deliver growth at meaningful scale, the quality of our balance sheet and the fact that we are unburdened by legacy issues makes us stand apart from other banks, and these strengths give us the potential to deliver on-going returns to our shareholders through both capital growth and progressive dividend payments.
“The completion of our IPO [initial public offering] will see us make a final payment to the Government of £50 million as consideration for our acquisition of Northern Rock plc, taking the total paid to over £1 billion.
“As we begin life as a public company, we are committed to maintaining the straightforward, transparent approach to business that we believe helps differentiate us. We are passionate about improving competition in UK retail banking and believe that today’s IPO is another step forward for us as we seek to deliver on that objective.
“I would also like to thank all of my colleagues at Virgin Money for their hard work in bringing us to this point. There are many colleagues, like me, who have spent 20 years working with the Virgin brand. As we previously announced, each employee will be awarded £1,000 worth of shares in the business upon flotation meaning that all colleagues have a stake in our future success.”