Virgin Money’s IPO finally takes off

Although for many of us the financial crisis of 2008, 2009 and 2010 seems a distant memory, the first run on a British bank, the Northern Rock, in 150 years no doubt still lingers long in the memory of people who held accounts and had mortgages with the bank.

The reason I mention this is that yesterday finally saw the IPO of the “saviour” of Northern Rock, Virgin Money, start trading conditionally with full trading expected next week. Virgin Money won the battle for the Northern Rock and paid around GBP 750m to the UK Treasury pretty much three years ago to the day of their LSE listing. Within about a week of acquiring the Northern Rock assets, Virgin Money were being linked to a listing. Speculation quietened down until the summer of 2013, and then began again in earnest in the Spring of 2014. Not unsurprising given the continued apparent openness of the “IPO” window.

Whilst just under 25 per cent of Virgin Money has been listed for a value of GBP 312m, this would value the total business at just under GBP 1.25bn, reaping tidy returns for Richard Branson and US billionaire Wilbur Ross of WL Ross & Co, both of whom will be divesting of some of their shareholdings.