|    FM Home   |    FM News   |    FM Forum   |    FM Blog   |    24th of February 2018
|   Banking  |   Insurance  |   Property  |   Mortgages  |   Economy  |   Investments  |   Credit Cards  |   Debt  |   Loans  |   Pensions  |   Companies  |  

All Financial News feed All Financial News

Only 2 bidders for Northern Rock as deadline is imminent

Bookmark and Share

by Kay Mitchell

It has become evident that there will be just 2 bidders for Northern Rock as next Monday’s deadline looms. Sources close to Northern Rock said it is ‘highly unlikely’ that anyone else would come in with an offer by Monday.

The 2 bidders include a consortium led by Sir Richard Branson’s Virgin Group and Olivant, run by Luqman Arnold, former Abbey chief executive.

However, neither Virgin nor Olivant has yet submitted proposals to the Tripartite Authority or to Northern Rock’s board. However, both parties say they will be in a position to do so on Monday.

Just last week, private equity groups Cerberus and JC Flowers were said to be interested, however, Cerberus, is believed to have found the deadline too tight and JC Flowers, is now pursuing a £4 billion takeover of troubled life insurer Friends Provident.

The new revelation has meant the Government’s hopes of creating a full-blown auction for the crisis-torn bank is in tatters.

Earlier this month, the Government outlined plans to turn the £26 billion lent to Northern Rock by the Bank of England into bonds guaranteed by the Government.

The bonds will be sold to private investors under the plans, drawn up by investment firm Goldman Sachs, potentially to speed up a private sale.

This would avoid nationalisation of the bank but it is not yet known if the private buyers will have the funds required for the deal.

At one point, it was believed that at least half a dozen new players were poring over the Goldman blueprint with a view to coming up with a rescue offer. However, Chancellor Alistair Darling, together with the Bank of England and the Financial Services Authority are working to a very tight deadline.

Mr Darling gave all interested parties just 2 weeks to come up with any alternatives to the current preferred bidders – Virgin and Olivant.

The Chancellor is keen to stick to his timetable of 4 February with the decision of a single preferred bidder expected a week later on 11 February.

This would mean the Chancellor would have just over a month to finalise the refinancing package so that it does not break his economic golden rule by the time of the Budget on 12 March.

Discuss this in the Finance Markets forums

Story link: Only 2 bidders for Northern Rock as deadline is imminent

News posted: February 1, 2008

Financial Services:

Related financial stories to: Only 2 bidders for Northern Rock as deadline is imminent:
Previous: «
Next: »

Visited 1501 times, 1 so far today

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.