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Ex-Abbey boss to become Virgin rival in battle for Northern Rock

12 November 2007
A company run by former Abbey boss, Luqman Arnold, could become the fourth participant in the Northern Rock takeover race. Reports indicate that shareholders of the investment company, Olivant Advisers, have raised more than £150 million – enough to buy more than 20 per cent of the Newcastle-based lender – prior to making a formal bid.

If a bid is put forward, the group would acquire a minority share in the bank – between 10 per cent and 20 per cent – and several of its senior executives would work alongside its current management team in an attempt to rescue the struggling mortgage company. Northern Rock has borrowed more than £20 billion from the Bank of England since September and it is thought that its debt could rise to £30 billion by the end of 2007.

An Olivant statement said its plan involved “the immediate introduction into Northern Rock of a core team of Olivant's experienced principals, led by its chairman, Luqman Arnold, to work intensively alongside its existing board and management.”

Mr Arnold is best known for his term at Abbey, having been drafted in to effect a turn around in 2002. He helped stabilise the bank before it was sold to Santander and also helped investment bank UBS Warburg recover after a $730 million loss.

The company’s share price rose when the news broke, but it remains to be seen whether Olivant will find favour on Friday, the deadline date for bids set by Northern Rock. Other potential buyers include the Virgin Group, private equity firms JC Flowers and Cerberus.

Find out more about Northern Rock mortgages

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