British finance minister Alistair Darling has asked troubled mortgage lender Northern Rock to consider rival bids to the one launched by Richard Branson's Virgin Group, the Financial Times says today.
The paper, which cited people close to the deal, said that private equity groups Cerberus and JC Flowers had submitted separate bids, after Northern Rock named a consortium led by Virgin as its preferred long-term saviour a week ago.
'Clearly it makes sense to have more than one interested party, from the taxpayer point of view and also from the standpoint of Northern Rock shareholders,' an unidentified official close to the deal was quoted as saying.
According to the FT, the JC Flowers offer has been deemed an 'approved bid' by the finance ministry because it meets the government's goals for the sale and recovering billions of pounds of taxpayer funds loaned to Northern Rock.
JC Flowers's bid pledges to repay £15 billion of government loans to Northern Rock immediately, and the rest will be repaid over three years at a commercial rate of interest.
Since Northern Rock was forced to seek an emergency loan from the Bank of England, Britain's central bank, earlier this year in the aftermath of the credit crunch in the financial markets, the government has lent the bank some £25 billion and guaranteed all savings held there.
