Northern Rock: Buyer Sir Richard Branson’s Virgin Group
Filed under: Business, News | By: Daniel
Posted on: November 26, 2007 | 1 Comment
It looks very likely that Sir Richard Branson’s Virgin Group and the consortium he is leading is going to buy Northern Rock as they have been named as the preferred buyer.
Virgin are looking to immediately re-pay around half of the taxpayers money that was borrowed, although this is not 100% yet as the deal is said to be very unpopular with shareholders.
On Friday night the stock market value of Northern Rock was around £360m, but Virgin said that it’s worth just £105m (both these figures are nothing compared to the worth of Northern Rock before the crisis started).
Do you think Branson’s consortium will get Northern Rock?
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I don’t see why this bid is unpopular with shareholders?
The market listing is kept, additional shares are issued through a rights issue at 25p each, of which Virgin will buy enough so as to eventually control 55% of the company; the remainder of the newly issued shares is offered to existing shareholders for purchase. At 25p a pop, it would be a sin not to buy. The company is worth a lot more than that, if only for the intangible value the Virgin brand adds.
RAB and the other major shareholders have vowed to boycott any offer that leaves shareholders in the dust. This means whole or partial sale of the company’s assets, nationalisation or administration. None of these options will happen if NRK gets taken over by Virgin, so again I don’t see why shareholders would not be happy.