Sir Richard Branson’s Virgin Group is the preferred bidder for Northern Rock, the stricken lender. BBC, Financial Times, Daily Telegraph
People familiar with the matter said a consortium led by Virgin had won favour with both Northern Rock and the UK government and is likely to be named as a preferred bidder today.
The decision comes as Alistair Darling faces growing pressure to solve the Northern Rock crisis. The bank has borrowed more than £20bn from the government and, if a deal cannot be completed, Northern Rock will have to be nationalised or put into administration.
In order to succeed, Virgin must finalise the financing for its bid and win the support of shareholders, who will be heavily diluted under the proposed deal.
A rival bid by JC Flowers, the US buy-out firm, remains on the table and is likely to be revised this week.
Virgin was selected after an intense weekend of talks between bidders, Northern Rock’s board of directors and the tripartite authorities – the government, the Bank and the Financial Services Authority.