JC Flowers Announces Potential Board For Northern Rock As Investment Battle Heats Up

by Stewart Douglas

Story link: JC Flowers Announces Potential Board For Northern Rock As Investment Battle Heats Up

The takeover talks surrounding troubled lender Northern Rock appear to have made headway today, with equity group JC Flowers announcing it had created a provisional management team in the event of it launching a successful bid for the bank.

The move today saw the private equity firm announce its choice of management staff should it succeed in any takeover bid launched for the company, suggesting that it may be on the brink of launching an official takeover bid for Northern Rock in direct competition to the potential bid from the Virgin led consortium also in the running.

Amongst the high profile management team announced today was Paul Myners, former chairman of Marks and Spencer who would be installed as chairman of the bank, along with a complete board of notable directors ready to step in should a takeover bid be launched.

Northern Rock has been subject to much takeover speculation in recent weeks after its well publicised liquidity failings led it to financial ruin, requiring emergency support from the Bank of England as customers queued for hours to withdraw their entire savings balances in a spate of panic at the management of the bank.

The news will be eagerly anticipated by the AIG and Virgin consortium that had also been in the running for the takeover of the sub-prime hit lender in recent weeks, with proposals for a Virgin Money brand-realignment on the cards were they to succeed.

Some analysts have predicted that the bank could be subject to something of a ‘bidding war’ between the two rival suitors as they vie for position to takeover the under-fire mortgage lender.

It remains to be seen which bidder will launch the first attack, and whether the other group will begin to wager on price with current Northern Rock shareholders in order to seal the deal.