Branson waives £100M he stood to receive from Nationwide for use of Virgin Money brand

Sir Richard Branson has agreed to waive greater than £100 million that he was entitled to obtain from Nationwide Constructing Society for the usage of the Virgin Cash model in its £2.9 billion acquisition of the financial institution.

Recognized for his strict licensing agreements granting firms the precise to make use of the Virgin title throughout varied industries, Branson has already secured a £250 million “exit price” to permit Nationwide to discontinue the Virgin model six years after the deal’s completion. Nonetheless, undisclosed sources point out that Branson may have obtained an extra substantial payout protecting royalties for as much as 40 years, probably amounting to a different £100 million, based mostly on a posh method outlined in a model license settlement from 2018.

Whereas Branson’s determination to forego the additional fee might immediate hypothesis about Nationwide’s negotiating ways, he stands to learn financially nonetheless. It’s anticipated that Branson will obtain roughly £700 million from Nationwide’s delisting from the inventory market, together with the £250 million exit price, £60 million over 4 years for the continued use of the model, and £400 million for his 14.5% stake within the financial institution.

Virgin Cash, because it exists as we speak, was shaped in 2018 when CYBG acquired Virgin Cash and adopted its model. Branson is counseled for his vigilant safety of the Virgin model, usually by licensing agreements facilitated by Virgin Enterprises. These agreements enable firms to make use of the Virgin title, even when Branson’s group doesn’t maintain a controlling curiosity within the enterprise.

Some observers within the monetary business speculated that the Virgin Cash branding settlement may deter potential bidders for the financial institution. Nonetheless, the specifics of this association had been outlined within the prospectus issued throughout CYBG’s acquisition of Virgin Cash.

Branson’s enterprise empire has beforehand examined such agreements in authorized battles. As an example, a branding deal between Virgin and Brightline, a Florida-based practice operator, included an exit price of as much as $200 million (£160 million).