Virgin Money’s bid for Northern Rock will take a blow later today when the ailing bank gives rival bidder, Olivant, joint preferred bidder status. An announcement is expected this afternoon (December 14).
The move comes after Olivant, led by former Abbey boss Luqman Arnold (pictured), threatened to pull out of the running after being prevented from gaining access to Northern Rock’s management and the banks that are providing financing for the deal. A meeting yesterday between Olivant, the Government and Northern Rock advisers is thought to have resolved the most significant issues.
The news that it will get equal status to Virgin comes after Northern Rock chief executive Adam Applegarth resigned ahead of schedule. He had been expected to remain until the end of January. He will be replaced by sales and marketing head, Andy Kuipers.
Meanwhile, there is intense speculation that nationalisation of the bank is becoming increasingly likely as the Chancellor, Alistair Darling, makes preparations for the alternative, should the auction process fail.