Offers are less than Friday's close: Bank

Pedestrians pass a branch of the Northern Rock in central London in October 2007. Simon Dawson/Bloomberg News

Northern Rock, whose shares closed at 132.6 pence on Friday to value the bank at about 560 million pounds ($1.14 billion), also said in a statement it expected to receive further expressions of interest in the next few days.

Separately, the Treasury, Britain's finance ministry, said its rescue of Northern Rock would have to be approved by the European Union and that any bid for the bank would be at risk if it required more assistance from the government.

The Treasury did not specify how much support it has provided to Northern Rock, but informed estimates have put the figure at up to 25 billion pounds.

Northern Rock was forced to go to the Bank of England for emergency loans two months ago, as the global squeeze on credit markets caused its funding strategy to collapse.

An auction of the company was begun, and Chief Executive Adam Applegarth resigned on Friday, as did several other directors. The bank's shares have lost 90 percent of their value this year, having set a high of 1,258 pence in February.

Northern Rock said on Friday it had streamlined its board "to assist a smooth and rapid decision-making process" regarding its strategic review.

Northern Rock said yesterday it had so far received two types of proposals - to invest in the company, including through an injection of assets as well as new capital, and to acquire parts of the company's business or assets.

The bank said its advisers were now in talks with interested parties to clarify their proposals.

One of the bids came from a group led by British entrepreneur Richard Bransons's Virgin group, while another has been lodged by former Abbey National chief executive, Luqman Arnold.

Philip Richards, chief executive of hedge fund RAB Capital who bought a stake in the company as shares plummeted in September, was quoted as saying in weekend newspapers that the firm needed time and proven leadership.

And Jon Wood, a former star trader of UBS and now the head of Monaco hedge fund SRM Global, was quoted as saying Northern Rock should remain independent. He is said to have called the sales process a farce.

Agencies

(China Daily 11/20/2007 page16)