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| Version 2 | Version 3 |
|---|---|
| Virgin favourite in Rock auction | Virgin favourite in Rock auction |
| (about 2 hours later) | |
| Northern Rock is poised to name a consortium led by Richard Branson's Virgin Group as favourite to buy the bank, the BBC has learned. | Northern Rock is poised to name a consortium led by Richard Branson's Virgin Group as favourite to buy the bank, the BBC has learned. |
| BBC business editor Robert Peston has discovered that the bank will name the group its preferred bidder on Monday. | |
| Virgin's bid, which has been approved by the Treasury, includes an immediate repayment of £11bn of the £25bn the bank owes to the Bank of England. | |
| If the bank's investors resist, it could be put into administration. | |
| "Right to the last, the Treasury has been considering a radical alternative, which was to nationalise the bank," Mr Peston said. | "Right to the last, the Treasury has been considering a radical alternative, which was to nationalise the bank," Mr Peston said. |
| "But it appears to have decided that taxpayers' interests are more likely to be protected by a private-sector solution." | "But it appears to have decided that taxpayers' interests are more likely to be protected by a private-sector solution." |
| If the Rock went into administration, shareholders might end up with nothing The BBC's Robert Peston Blog: Virgin is preferred Northern Rock bidder | If the Rock went into administration, shareholders might end up with nothing The BBC's Robert Peston Blog: Virgin is preferred Northern Rock bidder |
| Of the 10 expressions of interest from financial institutions in taking control of Northern Rock, Virgin's was preferable because it offered the best deal to the stricken lender's shareholders, Mr Peston said. | Of the 10 expressions of interest from financial institutions in taking control of Northern Rock, Virgin's was preferable because it offered the best deal to the stricken lender's shareholders, Mr Peston said. |
| But if investors, which include hedge funds RAB Capital and SRM Global, are unhappy with the terms offered and resist the deal, he warns that the company and the government are likely to make it clear that the alternative would be to put the bank into administration under insolvency procedures. | But if investors, which include hedge funds RAB Capital and SRM Global, are unhappy with the terms offered and resist the deal, he warns that the company and the government are likely to make it clear that the alternative would be to put the bank into administration under insolvency procedures. |
| "If the Rock went into administration, shareholders might end up with nothing," he said. | "If the Rock went into administration, shareholders might end up with nothing," he said. |