London - It's been a busy week for the Virgin empire. On Tuesday, the long-time Virgin Money backer Wilbur Ross led a £240m share sale, reducing his stake to 23 percent. On Thursday, the private equity group CVC left the gym chain Virgin Active as the South African retail tycoon Christo Wiese bought in, valuing the business at £870m.
The connection between the two transactions is, of course, Sir Richard Branson, but it is noticeable how incidental he is these days. Britain's most famous businessman is a past master at letting others stump up the cash while he takes a back seat and lets his carefully protected brand do the talking. In the case of Virgin Active, his group will bank £230m from Wiese but hang on to a 20 percent stake.
Virgin is not particularly a youth brand anymore, but appeals to the growing middle classes in South Africa, where most of its gym members are.
Sir Richard's other big achievement has been to win back the stock market. He shunned it for years after the difficult float of Virgin Group in 1986. The shares crashed because growth failed to match expectations and he retreated, hurt, matching the offer price to go private again in 1988.
In more recent years, Virgin Mobile, later rolled into Virgin Media, was a roaring success for investors. It has proved to be the same at Virgin Money, where the Virgin Group still owns 35 percent: the stock is up 40 percent since its delayed float last November. The City has lapped up the idea of it leading a new wave of retail banking challengers.
Again, Sir Richard appears to be barely there. His name does not even appear in Virgin Money's annual report, nor is he a director. No matter. The fairy dust he sprinkles still has huge value.
The Independent