Olivant last night appeared to have been persuaded to stay in the auction for Northern Rock after gaining reassurance it would be treated on equal footing to a rival bid consortium led by Virgin Group. Financial Times, The Times
The move came as Northern Rock parted ways with Adam Applegarth, its heavily criticised chief executive, and revealed a further writedown of £281m of its investments.
Olivant had threatened to walk away after becoming frustrated with the time the auction was taking and by its lack of access to the banks providing financing for the deal. Olivant yesterday met the government and Northern Rock advisers. Key issues of complaint have been addressed and it has been given better access to the financing banks, according to people close to the sale process.
Northern Rock agreed to the measure at a meeting with representatives of the Treasury, the Bank of England, the Financial Services Authority and the bidding consortium. In exchange, Olivant agreed to remain in the auction until at least mid-January.
Arnold had said that he would pull his bid for the troubled mortgage lender unless Northern Rock allowed him the same access to the banks funding Virgin’s bid. He also demanded that the Rock speed up its sale, fearing the slow process was damaging brand and customer loyalty.