Virgin Money eyes stricken N&P business

BUYERS are lining up for beleaguered building society Norwich & Peterborough, as it attempts to grapple with the fallout of a Financial Ombudsman Service ruling against it.

Sir Richard Branson’s fledgling Virgin Money financial services business has been linked with the firm and is said to be in advanced takeover talks.

Led by Jayne-Anne Gadhia, the lender is in the process of setting itself up in an attempt to become a major force in UK high street banking.

Buying Norwich & Peterborough, which operates 46 branches and has almost 500,000 members, would help the firm to develop its expansion plans.

Other potential bidders for the East Anglia-based business include US private equity house JC Flowers.

The American group made an informal takeover approach last year, although the deal was talked down by Norwich & Peterborough at the time.

JC Flowers was thought to be looking to amass a collection of building societies to create a “supermutual”.

It has already bought a similar sized mutual to N&P in Kent Reliance in order to get a foothold in UK financial services.

Fenchurch Partners is handling the sale of Norwich & Peterborough, with a deal expected within the next few weeks.

The deal comes as the building society faces a hefty charge following the collapse of Keydata, the firm that lost investors in its bonds millions of pounds.

N&P last week lost its battle to appeal a Financial Ombudsman Service ruling that forced it to pay compensation.

The building society was one of the biggest retailers of Keydata’s bonds. In 2006 and 2007, it advised 3,100 customers to invest £53.9m in the products.