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Virgin Money releases information for its IPO

Virgin Money’s much-heralded initial public offering will not be opened to retail investors, the bank has confirmed.

According to a statement issued to the London Stock Exchange by Virgin Money Holdings, the IPO – due within the coming weeks – will comprise an offer of ordinary shares to certain institutional investors in the UK and elsewhere outside the US.

The statement said that Virgin Money Holdings expects the offer of new shares will raise gross proceeds of approximately £150m.

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The news came after the firm had announced a deal to raise £160m in the debt markets to repay part of a financing package taken on when it acquired part of the bailed-out Northern Rock for almost £800m in 2012.

Adviser view

Richard Hunter, head of equities for Bristol-based Hargreaves Lansdown, said: “It is disappointing that Virgin has chosen to exclude private investors, particularly given the ubiquity of its brand and the nature of its business.

“Nonetheless, it is an uncomfortable truth that, given the relatively small amount being raised, in terms of convenience and speed to market this may be the prudent financial choice for Virgin Money.”