Deadline for Northern Rock bids

Source: Exec Digital UK

Date :16/11/2007 09:17:05

Northern Rock PLC is expecting to receive as many as eight proposals today, the deadline for indicative proposals for the stricken bank.

Some proposals are only for parts of the business rather than the whole bank, and although the official deadline is today, late proposals could still trickle in over the weekend.

It is understood that “one or two” banks from continental Europe and Asia are also looking at putting in proposals.

Two others to confirm an interest in the bank is U.S. buyout firm JC Flowers and a consortium led by Richard Branson's Virgin Group. U.S. private equity firm Cerberus is also interested expected to put in proposals to buy the bank.

Infrastructure

Northern Rock is estimated to have borrowed up to £25 billion from the Bank of England since it first turned to the central bank two months ago.

However, a briefing memorandum posted on FT.com's Alphaville site showed it could still owe as much as £5.9 billion to the Bank of England in 2010.

The memorandum - sent to potential buyers - outlines three options for Northern Rock, including a "preferred option" of selling all of the company.

The other two options involve splitting it up or selling off basic infrastructure such as branches and leaving some assets and liabilities behind for an orderly run-off.

Northern Rock is being advised by Merrill Lynch, Citigroup and Blackstone.

November 16, 2007