Prior to the proposed £1.7bn takeover of the company of Virgin Money, the owner of Clydesdale Bank has admitted that Richard Branson and the people who are associated with him would likely bring the brand of the company into “disrepute.”
In the shareholder prospectus of the firm, the owner of Clydesdale Bank and Yorkshire Bank (CYBG) honours the “innovative” Branson, however, he warns that should any of his plans go downhill, it would potentially be faced with massive criticism in the media and therefore, it will risk damaging the image of CYBG by association.
The degree to which Branson is entwined with his brands is laid bare with the warning that the death of the 68-year-old would have a related detrimental effect on the public perception of CYBG.
It stated: “Through exiting the business or upon his death, the goodwill of the ‘Virgin’ brand, especially the brand’s popularity with consumers, may suffer a decline which may have similar consequences on the “Virgin Money” brand.”
Last June, the company confirmed the £1.7bn merger deal with Virgin Money. It said that the proposed partnership will produce “the UK’s first true national banking competitor to the status quo.”
CYBG said that the cost synergies would result in one-off pre-tax costs of around £240 million. It will be spread across a three-year period, while it will cost approximately £60 million to rebrand as Virgin.
The bank will incur around £34 million in accounting, transaction, and legal fees that are related to the offer of the company of Virgin Money. If the deal does not go ahead, the firm will still be expected to pay Virgin Money £12.2 million, excluding VAT, of transaction costs such as advisory and legal fees.
After the completion of the planned takeover, the shareholders of Virgin Money will own 38 percent of the combined group.