Olivant to submit revised Northern Rock bid

by Gill Montia

Story link: Olivant to submit revised Northern Rock bid

Olivant, the investment group headed by former Abbey chief executive, Luqman Arnold, is expected to present a revised bid for Northern Rock in the near future.

The group is reported to be in negotiations with both Northern Rock and banks that could help finance the takeover.

It appears that a number of banks are willing to providing funding for the successful bidder, rather than committing themselves one particular offer.

Virgin Group has maintained its preferred bidder status but since this was confirmed last week, both JC Flowers and Cerberus, the US private equity firms, have returned with revised offers.

The Treasury is unlikely to favour any plans to place the mortgage bank into administration, or for nationalisation.

The original approach from JC Flowers involved liquidation of the business but this has since been revised with a promise that the bank would remain independent and shareholders could benefit from a recovery.

However, Northern Rock is believed to be drawing up emergency plans to repay savers’ deposits if a suitable bidder does not emerge.

Meanwhile, Northern Rock has received further adverse publicity with the news that staff have received a 4% salary increase, a 2% one-off sum and a £200 Christmas bonus.

The remuneration is intended to keep pay in line with the cost of living and acknowledge the hard work of employees.

The average Northern Rock employee earning £25,000 will be around £1,700 better off as a result, but the bank’s top management will not receive the additional cash benefits.