Darling Calls For Rock To Consider Options

The UK Treasury fronted by Chancellor Alistair Darling has today suggested that it would benefit from the emergence of a bidding war over the Northern Rock takeover, and has encouraged executives within the company to carefully consider the range of options on the table before agreeing to any single bid.

The announcement follows the troubled bank’s declaration last week that it preferred the offer thus far proposed by the Virgin consortium, which also carries the backing of insurer AIG amongst other firms vying for a slice of the Northern Rock, in favour of the other bids thought to be lodged over the course of this week.

Amongst the other contenders are private equity house JC Flowers, headed by Chris Flowers, formerly of Goldman Sachs, which on Friday suggested it would look to retain a flexible approach as to the future of the company in its bid, and Cerberus, also a private equity group interested in the company.

It is also thought that a further private equity firm, Olivant, will emerge as a contender for the takeover, although analysts have nevertheless remained behind the Virgin proposals as the most likely to succeed.

Speaking today, Alistair Darling said that the British taxpayer would benefit from increased competition amongst the interested parties to the extent of outstanding loans to the bank, and that by encouraging competition between the firms the bank could achieve the best deal for its shareholders and creditors across the board.

At present, the Virgin bid is by far leading the way in the chase for the takeover, with the interested equity groups required to submit proposals before Christmas, according to the interests of the Chancellor.

It remains to be seen whether the three other potential contenders will re-enter the fray, and whether the desired bidding war will result in maximum value for the stakeholders of Northern Rock.

Story link: Darling Calls For Rock To Consider Options