While Northern Rock chief executive, Adam Applegarth, and non-executive chairman, Matt Ridley, prepare to face the Treasury Select Committee on October 16 over the bank’s recent crisis, rescue bids have been proposed from at least three directions.
A statement from the company said: "Northern Rock PLC confirms that it is working with a number of potentially interested parties regarding proposals for a variety of potential transactions as well as developing further options to explore with new parties as part of its review of all strategic options in the interests of shareholders, customers and other stakeholders.”
When news of a potential bid from a consortium led by Virgin Group came to light last week, share prices rose significantly. However, shares traded down 19.5 per cent at 220 pence today. This suggests that investors are now assuming that takeover offers will be much lower than initially expected.
Although JC Flowers and Cerberus continue to be cited as candidates for the takeover, the Virgin consortium is being pitched as the most likely group to acquire the Newcastle-based lender. Virgin is now said to be looking for an industry veteran to act as chairman for the company should the move go ahead.
It is understood that former Bank of Scotland chief executive Sir Peter Burt, former HBOS chief executive James Crosby and previous executives at Lloyds TSB, Sir Brian Pitman and Sir Peter Ellwood, are among those on the shortlist for the role.
And, having already gained the financial backing of AIG, WL Ross, First Eastern Investment Group and Toscafund, it is also said to be looking for additional investment from several US and Middle Eastern companies.
However, Northern Rock confirmed that: "This process and the discussions it is having are at a very early stage and that the proposals it has received so far are preliminary in nature."
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