Northern Rock Predator Announces Plans

One of the leading runners in the Northern Rock takeover battle has today announced the details of its plans for the direction of the bank should its offer be accepted, casting some more light on the situation that looks likely to continue to unfold over the remainder of the year.

The bid submitted by European private equity firm Olivant, run by ex-banking boss Luqman Arnold, was today unveiled in more detail, elaborating on its intentions following the takeover process, which saw the firm guaranteeing immediate repayment of outstanding government debt, with the remainder owing to the Bank of England to be settled over the next two years.

It is thought that amongst the proposals delivered, the immediate payment terms as regards government-sponsored debts are likely to be some of the most attractive. Additionally with other frontrunners dropping out over the last few days, it looks increasingly likely that the bid will be seriously considered.

The flagship proposal also outlined intentions to keep the Northern Rock branding, unlike the leading Virgin bid’s plans to rebrand Virgin Money. However it remains to be seen whether the bank can ever recover the image of trust with deposit taking and savings accounts in the consumer market.

Amongst other news today came reports of other highly-rated bidder JC Flowers, who it is thought have written to the Treasury to declare they no longer want to bid for the Rock, on the grounds that is cannot foresee a common ground in negotiations with the Treasury over the outstanding loan amounts.

Olivant today also delivered its intentions to raise funds from a capital offering and rights issue, with a view to repleneshing reserves and rebuilding its business in the consumer retail sector.

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