Eventual Return To The Private Sector
When the British Government nationalised the bank, they noted that it was to be a temporary measure, and one of their aims was eventually return the bank back to the private sector. On 26 April 2009, The Times suggested that Northern Rock would be sold by the Government by the end of 2009. Potential buyers include Virgin Money, National Australia Bank, Santander, Blackstone and TowerBrook. The Times noted that a British supermarket chain, Tesco, interested in buying parts of the bank. It is thought that adviser Credit Suisse examined the plans to split the bank into 2 parts, to separate the most toxic loans and assets into a "bad bank". In May 2009 the EU demanded more information about the split. Another possibility is a bond debt buyback.
A spokesperson for the bank said that the sale of the bank is just one option, and there is currently no time scale. Reuters noted that there were considerations to sell the bank, but no formal discussions were taking place with potential buyers. Alistair Darling has stated that he is in no "hurry" to return the bank back to the private sector.
In January 2010 National Australia Bank were widely reported to have lined up potential advisers on the deal to buy the Northern Rock. NAB already own two brands in the UK, Clydesdale and Yorkshire banks. Also in January 2010 Virgin purchased a small bank, the Church House Trust, but according to the Times and other sources Virgin still have an interest in Northern Rock and have been contacting companies such as Blackstone.
In July 2010 it was reported that a consortium of City executives were gathering to place a bid for Northern Rock using the vehicle NBNK Investments. UKFI have been briefed on the proposals. On 4 November Gary Hoffman left Northern Rock to become CEO at NBNK Investments. Hoffman was put on gardening leave by Northern Rock until he joins NBNK on 1 May 2011. Hoffman was to receive a package worth around £500,000 for his gardening leave, but decided to turn it down. Due to Hoffman's previous position NBNK Investments cannot table a bid for Northern Rock for a period of 12 months from 1 November 2010.
In January 2011 renewed speculation about the bank's sale was reported as it emerged that UKFI were beginning to search for both advisers and suitors for the potential sale. On 11 March Deutsche Bank AG were appointed to be the advisers for Northern Rock's return to the private sector.
On 28 March 2011 the bank announced that it was likely that around 680 more jobs would go during the restructuring prior to the bank's return to private sector.
On 15 June 2011 it was announced that the bank is to be sold to a single buyer in the private sector by the end of the year.
On 17 November 2011 the UK Government announced the sale of Northern Rock to Virgin Money for £747m.
Read more about this topic: Nationalisation Of Northern Rock
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