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Print articleThree Set to Bid for Northern Rock Ahead of Deadline
February, 2008 -
Three separate bids are expected to be submitted to rescue Northern Rock ahead of today's government-imposed deadline.
Following a series of government interventions, the chancellor is keen on a private sector rescue for the bank, which has already received £25 billion worth of loans from the Bank of England.
Alongside Northern Rock's management team, the investment fund Olivant has announced that it is to put forward a bid, though Sir Richard Branson's Virgin Group is seen by many observers as the favourite to take on the bank.
Virgin has pledged to inject around £1 billion in cash of new equity into Northern Rock in comparison to the £800 million offered by Olivant and the maximum of £750 million by the management team.
"We believe we will create a very strong bank in the future and we hope to make sure the taxpayers will get all their money paid back," Sir Richard said.
The final decision lies with the chancellor Alistair Darling, though each of the bids will be looked at by the Bank of England, the Financial Services Authority and Northern Rock's non-executive directors over the coming weeks.
However, the government has not yet ruled out the possibility of nationalising Northern Rock should none of the bids prove to be satisfactory.
Following a series of government interventions, the chancellor is keen on a private sector rescue for the bank, which has already received £25 billion worth of loans from the Bank of England.
Alongside Northern Rock's management team, the investment fund Olivant has announced that it is to put forward a bid, though Sir Richard Branson's Virgin Group is seen by many observers as the favourite to take on the bank.
Virgin has pledged to inject around £1 billion in cash of new equity into Northern Rock in comparison to the £800 million offered by Olivant and the maximum of £750 million by the management team.
"We believe we will create a very strong bank in the future and we hope to make sure the taxpayers will get all their money paid back," Sir Richard said.
The final decision lies with the chancellor Alistair Darling, though each of the bids will be looked at by the Bank of England, the Financial Services Authority and Northern Rock's non-executive directors over the coming weeks.
However, the government has not yet ruled out the possibility of nationalising Northern Rock should none of the bids prove to be satisfactory.
