Northern Rock suitors clarify intentions

Proposals from bidders hoping to take control of Northern Rock are expected to be submitted by Monday‘s deadline, with the bank’s own management claiming to have won pledges of at least £400m in support of its own rescue plan. The “stand-alone” restructuring proposal is being led by Paul Thompson, a non-executive director at Northern Rock. Also competing is a consortium led by Virgin Group and buy-out group Olivant. Nationalisation remains an option. Despite recent speculation Olivant was considering walking away, the buy-out firm said Sunday night it had had not dropped out – although one person close to the situation said it was not “100% guaranteed” that the bid would be submitted Monday. Thompson spoke to the stricken bank’s institutional shareholders last week and is understood to have gained support from existing and would-be investors totalling £400m. But his proposal is not thought to have won over Northern Rock’s biggest shareholders RAB Capital and SRM, which are supporting the rival proposal by Olivant.