CYBG has not quite gone all in to tempt Virgin Money into a merger, but the stakes have been raised. Analysts have speculated on a range of scenarios since its interest in a deal was revealed last month. Options have ranged from the parent of Clydesdale and Yorkshire banks not making a bid through to it increasing the proportion of shares being offered and adding a cash top-up.
The reality is somewhere in between. The initial all-share proposal involved Virgin Money investors ending up with 36 per cent of the enlarged banking group. Improved terms announced yesterday would result in Virgin shareholders getting 38 per cent of the group. That equates to 1.2125 CYBG shares for each one of Virgin Money, compared with the 1.1297