Renewed interest for Northern Rock

Crisis-torn Northern Rock has received fresh interest from firms which might be considering a buyout or investment. However the bank did not divulge the names or how many proposals it has received.

It did say that one of the offers was well below Tuesday’s closing price, prompting a fresh slide in its shares. At 8.10am today, shares were down 13.6% at 87.9 pence valuing the business at about £370 million.

Those expressing an interest in Northern Rock include private-equity groups, JC Flowers, Cerberus, Blackstone, Apollo and Dutch bank ING. A consortium led by Virgin boss, Richard Branson, has also joined a growing list of those expressing an interest in the bank.

Furthermore, Luqman Arnold, the City stalwart and former Abbey chief executive, launched a proposal to rescue Northern Rock just last week.

In a statement, Northern Rock said the company has received additional indicative expressions of interest covering a range of options for the business, one of which does contemplate an offer for the company materially below the market price at the close of business on Tuesday.

Northern Rock’s advisers have been considering initial proposals for full or partial takeovers.

It is believed that the Bank of England has lent Northern Rock £24 billion in emergency funding, a move defended by Chancellor Alistair Darling in the Commons earlier this week. Mr Darling told the Commons that the loan move was right to give the bank time to assess its strategic options.

It is rumoured that the Government is favouring the proposal from Luqman Arnold in order to keep the bank as a solid entity which would protect taxpayers, savers and the financial system.

Other alternatives for Northern Rock’s fate is going into receivership, selling all or part of the bank or nationalising it.
Northern Rock has about 6,000 staff and is keen to secure the bank’s future as soon as possible.

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