it emerged that Sir Richard Branson's Virgin Group is in talks about a possible take over of the stricken lender.
The stock of the Newcastle-based bank rose 5pc to 271 in early trading. Virgin have met with the management of Northern Rock and are said to be in discussions with investors in the Middle East and the United States with a view to forming a consortium which would inject funds into Northern Rock in return for a controlling stake.A source close to the situation said that if a deal went ahead, Virgin would push to rebrand Northern Rock as Virgin Money.
Leading the talks from the Virgin Money point of view has been chief executive Jayne-Anne Ghadia who helped set up the company before leaving to join Royal Bank of Scotland where she was responsible for a £66bn mortgage book. She rejoined Virgin Money this year, and part of her remit was to re-establish the company's presence in the mortage market.
Merrill Lynch, adviser to Northern Rock, has given Virgin and the other interested parties a deadline of the end of the day to submit proposals for a buyout, giving an overview of plans, details of the funding package and financial planning, and strategy going forward. Virgin Group declined to comment. The move came as the Chancellor, Alistair Darling, promised savers that they would still be able to withdraw money even if their bank or building society went under....Mr Darling – who added that he had a mortgage with Northern Rock, an unspecified home loan – insisted that the Government had done everything in its power to avoid the crisis.http://www.telegraph.co.uk |