Virgin Money’s biggest shareholder has said that it would have been better for Nationwide members to get a vote on the takeover of Virgin Money.

He has sided with a petition demanding that Nationwide’s 16 million members get a say on the deal which has over 5,000 signatures.

The petition warns the £2.9 billion takeover would create huge problems for the Swindon-based building society.

Allan Gray, an Australian fund manager, has over 10 per cent of the Virgin Money voting shares.

Simon Mawhinney, MD and CIO of Allan Gray, told the Mail on Sunday: “Giving them [members] a vote on this transaction would have been a much better path forward from a governance perspective.”

The petition created by Mikael Armstrong warns the acquisition represents poor value for money. It says merging Virgin Money and Nationwide’s IT systems would create huge costs.

It adds that the sale itself is 40 per cent above the bank's market value and the money could be reinvested directly into expanding Nationwide’s own services.

Mawhinney agreed, reportedly saying that the deal ‘is likely to sell shareholders very short’.

He said of member’s doubts: “I suspect their disappointment pales in comparison to ours.”

While Nationwide members do not get a vote on the takeover, Virgin Money shareholders do.

The result of their vote will be announced at a meeting on May 22.

To approve the takeover requires 75% of shareholder votes in favour.

Mawhinney did not comment on whether Allan Gray would vote for or against the deal, but if other shareholders feel similarly, the proposed takeover could be blocked.

Mikael Armstrong created the petition and now leads the campaign Give Nationwide Members a Say on the purchase of Virgin Money.

Swindon Advertiser: Mikael Armstrong created the petition and delivered it to Nationwide HQ

He said: “The leader of the largest independent shareholder in Virgin Money, Allan Gray - owning 10% of the stock and set to receive £290 million - has gone on the record ahead of a Virgin Money shareholder vote, stating that it's a bad deal and a bad process and that it would have been better for Nationwide to hold a member vote.”

The campaign believes Blackrock and Vanguard to be the next two largest shareholders, combined owning around 12% of the stock.

Nationwide has declined to comment.

The campaign can be seen here: