Northern Rock shares plunged over 40 per cent this morning in the aftermath of the Chancellor pledging to veto offers that failed to safeguard the loans made to the lender and one bidder walking away.
Shares in Northern Rock fell as low as 61p from the morning’s starting price of 104p after American private equity firm Cerberus ruled out a bid for the lender.
Northern Rock’s share price fell sharply yesterday after it announced that all proposals to buy it were materially below its market price.
The Treasury released a statement yesterday stating that potential bidders for the business could not be guaranteed the Bank of England’s loans past February- which was followed up by a statement to Parliament from Alistair Darling.
At 10am this morning Northern Rock shares had recovered to 83p, a drop of 21 per cent for the day.