Northern Rock: Predators circle the stricken beast

Last updated at 23:38 16 September 2007


Other banks are eyeing up Northern Rock after the beleaguered lender effectively put itself up for sale.

City insiders believe the Newcastle based business has scant hope of an independent future and several high street giants are considering whether to make a move.

Northern Rock had already been holding talks with the clearing banks, including Lloyds TSB, but discussions fell apart the week before the Bank of England agreed an emergency loan.

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Lloyds

HSBC - which is thought to have held talks with Northern Rock - and the Royal Bank of Scotland could also rank among the interested parties.

Earlier talks are understood to have broken down because the bids on the table were too low. They were also said to have relied on more generous Government backing than the Bank of England was willing to give.

With no other options left on the table, the board at Northern Rock approached the BoE, Treasury and FSA last week and secured a loan at a penal rate.

An impending takeover will do little to comfort shareholders, who watched the stock value crash 32 per cent after news of the loan emerged.

The shares finished at 438p on Friday, valuing the firm at £1.8billion. Bankers think Northern Rock would be lucky to be sold for as much as 300p a share.

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