Richard Branson is odds on favourite to take over Northern Rock.
Shareholders will have to decide on Branson’s plan to take over the bank and rebrand it Virgin Money. Under the deal, shareholders will be left with one third of the bank between them and the bank will keep its stock market listing.
The two biggest shareholders might not be keen on the takeover bid but the likely alternative is that the bank goes into administration meaning that they’ll most likely recieve nothing by the time the administrators have charged their horrendous fees and Crown debts – such as the Bank of England loan they were given – have been repaid.
The Virgin takeover will involve the Bank of England keeping their emergency credit line open for the first three months and Virgin refinancing £11bn of the £25bn Bank of England loan Northern Rock received so that the loan doesn’t fall foul of Federal Europe’s rules on state aid which are rigourously across the continent. Apart from in France. Or Germany. Or Spain. Or Italy ….