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Shareholders support Rock in-house bid

One of Northern Rock’s biggest shareholders, RAB Capital, has thrown its support behind the bank’s in-house rescue after Olivant pulled out of the running for the stricken bank.

There are only two rescue bids now left on the table – one from the Virgin-led consortium and an offer from the in-house management team to be headed by former Britannic Group and Resolution chief executive Paul Thompson.

Hedge fund RAB Capital, which owns 7.7 per cent of Northern Rock’s shares, had previously given its backing to Olivant’s bid.

Hedge fund SRM, the biggest shareholder in Northern Rock with 10 per cent of the total shares, has also indicated it would support the in-house bid if it receives certain reassurances.

A RAB spokesman says: “In the current circumstances, there is only one strong and independent solution available, in the shape of the proposal from the Northern Rock management team led by Paul Thompson.”

Olivant pulled out of the running just an hour before Monday’s 4pm deadline.

Chairman Luqman Arnold says: “Despite working intensively, we have been unable to formulate a value creation proposal which meets our investment criteria while also respecting HM Government’s proposed financing terms and the interests of other stakeholders in the company.”

The in-house management proposal aims to raise around £500m and plans to save the Northern Rock name. Virgin’s bid involves injecting £1.25bn and rebranding the firm as Virgin Bank.


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