Mortgage News
Virgin poised to buy the Rock in £1bn deal
Sir Richard Branson is on the brink of buying the taxpayer-owned Newcastle bank Northern Rock in a £1bn deal as American rivals start to fall away.
The final bids for the nationalised bank are due this week, paving the way for the end of its four-year spell under taxpayer protection.
Although there are two rival bidders, sources close to the auction placed Virgin as favourite, according to the Sunday Times.
The sale is expected to crystallise a loss of at least £400m for taxpayers, who pumped in £1.4bn. The Newcastle-based bank also received billions of pounds of emergency loans.
Virgin is backed by Wilbur Ross, the billionaire Wall Street investor, an Abu Dhabi investment fund and a large British pension fund.
It was rumoured to have bid close to £1bn early on, but the price offered by all the bidders is likely to have fallen since the auction began.
Conversations you need to have with landlords before the Renters’ Rights Act
Sponsored by BM Solutions
Virgin’s rivals appear to be falling by the wayside. A bid by JC Flowers, the American private equity firm, appeared to be floundering this weekend. Flowers had been working on a joint bid with Principality building society, but the talks broke off on Friday.
NBNK Investments, the buyout vehicle led by Lord Levene and Gary Hoffman, former chief executive of Northern Rock, is expected to table an offer.
However, Levene and Hoffman are said to believe that the new, reshaped Northern Rock is too small to survive as a standalone bank.