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Rock offers 'undervalue the bank' | Rock offers 'undervalue the bank' |
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Northern Rock has said the proposals it has received so far from potential investors are "materially below" the stricken bank's share price. | |
Two suitors, Virgin Group and Olivant Advisers, have both submitted their proposals to rescue the bank. | Two suitors, Virgin Group and Olivant Advisers, have both submitted their proposals to rescue the bank. |
The bank said that it expected further expressions of interest to emerge. | The bank said that it expected further expressions of interest to emerge. |
Separately, the government has said there is no certainty that any bidder for the Rock will have access to £24bn of emergency loans after February. | |
But it added that it was "willing to discuss" any proposals that envisaged a continuing role for the Bank of England, the Treasury and the Financial Services Authority. | |
Northern Rock's shareholders have had a huge dose of bad news Robert PestonBBC Business Editor class="" href="http://www.bbc.co.uk/blogs/thereporters/robertpeston/2007/11/treasurys_fiveyear_rock_loan.html">Read Robert Peston's blog | |
The Treasury has also warned that the support it has provided to the Rock represents state aid under EU rules and may therefore turn out to be illegal. | |
The comments came as Chancellor Alistair Darling outlined the government's stance on the possible sale of Northern Rock. | |
Northern Rock, whose chief executive Adam Applegarth resigned on Friday, said that while it would still analyse and discuss proposals it had received, "the value to shareholders from any of the proposals remains highly uncertain". | |
They would depend on factors including an improvement in market conditions such as access to liquidity, it said. | |
Northern Rock shares fell 2% in early trading to 129p. They had hit a high of £12.58 in February. | |
The bank was forced to seek emergency funding from the Bank of England in September after the jamming up of world credit markets wrecked its business model. |