JC Flowers Hit Back In Fight For Northern Rock

by Stewart Douglas

Story link: JC Flowers Hit Back In Fight For Northern Rock

Private equity group JC Flowers have today announced they are looking to re-enter the bidding from troubled lender Northern Rock, by approaching with a bid on flexible terms regarding the contentious issue of whether to maintain the bank’s listing on the FTSE exchange.

The American based equity house, run by ex-Goldman Sachs employee Chris Flowers had been thought to be an early favourite for the takeover, until Northern Rock bosses announced that Richard Branson’s Virgin proposal in consortium with AIG would be preferred in any takeover approach.

JC Flowers wrote to the UK Treasury today outlining its plans, which it is thought would see discretion exercised as to whether or not Northern Rock would remain listed on the stock exchange, as part of its proposal for a potential takeover deal.

The move comes amidst speculation of an imminent third bid from equity group Olivant, which it is thought may be brought to the fore as early as next week, introducing further competition for the flailing financial institution, which currently owes in excess of £20 billion to the Bank of England.

The JC Flowers announcement today, it is thought, has been designed to tip the scales in favour of the equity group’s bid, pending the acceptance of the proposals by Northern Rock and the Treasury over the course of next week and of course depending on the outcome of the Olivant bid expected on Monday or Tuesday.

The leading Virgin bid would see Northern Rock rebranded as Virgin Money, and would see the company remain listed as Northern Rock on the FTSE.  It remains to be seen whether the move by JC Flowers today will be sufficiently weighted to enable a more competitive battle in the run up to any official decision.