Olivant pulls out of the running for Northern Rock

04 February 2008 / by Rachael Stiles
At the final hour, Olivant has pulled out of the race for Northern Rock, leaving just two other options for the Government to choose from before turning to the last resort of nationalisation.

Today marks the last day that potential bidders can put forward their proposals to rescue the struggling mortgage lender. Olivant's withdrawal means proposals are expected from just Virgin and Northern Rock's own management group.

If the Government is unsatisfied with all of the proposals put forward – and currently only two are thought likely since nothing more has been heard from Cerberus or JC Flowers, which both pulled out last year – then it has announced that it will have little other choice than to nationalise the bank.

In a release made this afternoon, Olivant revealed it has decided not to pursue the bank any further. Olivant Chairman, Luqman Arnold, said that "Despite working intensively, we have been unable to formulate a value creation proposal which meets our investment criteria whilst also respecting HM Government's proposed financing terms and the interests of other stakeholders in the company."

A decision is expected from the Government by the end of the month.

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