Treasury tells Rock suitors to improve offers

The Treasury has given Northern Rock bidders a no-holds barred ultimatum to
better their offers or lose out.

The government last night told Virgin Group and the Rock’s management team
that the offers so far were unacceptable and nationalisation would be the only
option if improved bids were not put on the table.

Although John Kingman, the lead Treasury official, has informed bidders that
the Virgin Group’s offer was superior, he added that it would need to raise the
amount it paid the government to guarantee a bond issue of £30bn.

Alistair Darling is calling on bidders to increase their equity stake to
ensure taxpayers benefit from any recovery by the bank.

Vince Cable, the Liberal Democrats deputy leader said the government ‘may
just be talking tough in order to extract some last-minute concessions’.

Since Olivant withdrew from the bidding war, only the Virgin consortium and
the management bid led by Paul Thompson remain.

Further reading:

Rock plans
are ‘an accounting trick’

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