Branson in field for Northern Rock buyout

16 November 2007

The deadline for investors who are considering buying out Northern Rock has been reached today, with Virgin's Richard Branson among the major players.

US private equity group JC Flowers is vying with Richard Branson's Virgin group to bid for the Newcastle-based finance firm.

Private equity firm Cerberus is also reported as having designs on the bank, while Abbey and Olivant have plans to rescue Northern Rock.

Northern Rock is currently being advised by Merrill Lynch, Citigroup and Blackstone, and an injunction may mean that information sent to potential suitors is limited.

The UK's fifth-largest mortgage lender now owes over £20 billion to the Bank of England.

In other news, government ministers have called for a full inquiry into the Northern Rock situation.

Nick Clegg, the shadow home secretary for the Liberal Democrats, said that the Treasury, the Financial Services Authority (FSA) and the Bank of England had fought "like rats in a bag" over the crisis.

He said: "The handling of the Northern Rock situation has exposed serious systemic failures. Now we are witnessing spats between the Treasury, FSA and the Bank, and this has seriously damaged the credibility of all three parties. It is like watching them fighting like rats in a bag trying to lay the blame on each other."

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