At least two firm bids for beleaguered mortgage lender Northern Rock have emerged, but British taxpayers could still end up propping up the company for up to three years.
An offer from private equity firm JC Flowers would see the estimated £24 billion (€33.5 billion) borrowed from the Bank of England paid back by the end of 2010.
A second bid emerged from American private equity firm Cerberus, which was previously believed to have pulled out of the race.
News of Cerberus's reported exit pushed Northern Rock shares to record lows.
The details of the bid remain unclear, but could involve a bid for part of the firm.
Shares in the mortgage lender closed under £1 for the first time yesterday at 97p, a fall of nearly seven per cent. The share price values the company at around £407m.
JC Flowers is backed by £15bn from banks, but it could take until the end of 2010 to repay the rest of the estimated £24bn borrowed by the group, sources said.
New York-based JC Flowers has a strong record of snapping up stricken financial companies and reviving them - often for big profits.
But shareholders are set to lose out if the offer goes ahead as Flowers will only pay a "nominal" amount for the business.
|