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| Rock offers 'undervalue the bank' | Rock offers 'undervalue the bank' |
| (about 4 hours later) | |
| Northern Rock has said the proposals received so far from potential investors were "materially below" the stricken bank's current share price. | Northern Rock has said the proposals received so far from potential investors were "materially below" the stricken bank's current share price. |
| Two suitors, Virgin Group and Olivant Advisers, have both submitted their proposals to rescue the firm. | Two suitors, Virgin Group and Olivant Advisers, have both submitted their proposals to rescue the firm. |
| Separately, the government has said there is no certainty that any bidder for the Rock will have access to £24bn of emergency loans after February. | Separately, the government has said there is no certainty that any bidder for the Rock will have access to £24bn of emergency loans after February. |
| Northern Rock shares plunged by 19% to an all-time low by Monday afternoon. | |
| This came after the Treasury warned that the support it has provided to the Rock could represent state aid under EU rules and therefore may be illegal if continued for an indefinite period. | This came after the Treasury warned that the support it has provided to the Rock could represent state aid under EU rules and therefore may be illegal if continued for an indefinite period. |
| The Treasury said that it was "willing to discuss" any proposals that envisaged a continuing role for the Bank of England, the Treasury and the Financial Services Authority. | The Treasury said that it was "willing to discuss" any proposals that envisaged a continuing role for the Bank of England, the Treasury and the Financial Services Authority. |
| Northern Rock's shareholders have had a huge dose of bad news Robert PestonBBC Business Editor Read Robert Peston's blog Northern Rock's share price Read full Treasury statement | Northern Rock's shareholders have had a huge dose of bad news Robert PestonBBC Business Editor Read Robert Peston's blog Northern Rock's share price Read full Treasury statement |
| 'Value uncertain' | 'Value uncertain' |
| Later, Chancellor Alistair Darling is expected to outline the government's stance on the possible sale of Northern Rock in the House of Commons. | Later, Chancellor Alistair Darling is expected to outline the government's stance on the possible sale of Northern Rock in the House of Commons. |
| In its statement, the Treasury says that costs and risks associated with Northern Rock should be "borne to the greatest extent possible" by the current and future providers of capital, an indication that it is worried that taxpayers could lose money as a result of the woes at the bank. | In its statement, the Treasury says that costs and risks associated with Northern Rock should be "borne to the greatest extent possible" by the current and future providers of capital, an indication that it is worried that taxpayers could lose money as a result of the woes at the bank. |
| As well as Virgin and Olivant - an investment firm headed by former Abbey boss Luqman Arnold - private equity firms JC Flowers and Cerberus have eyed the Rock. | As well as Virgin and Olivant - an investment firm headed by former Abbey boss Luqman Arnold - private equity firms JC Flowers and Cerberus have eyed the Rock. |
| The Newcastle-based company, which employs about 6,000 staff, said that it expected to receive further expressions of interest over the "next few days". | The Newcastle-based company, which employs about 6,000 staff, said that it expected to receive further expressions of interest over the "next few days". |
| HAVE YOUR SAY Northern Rock should be nationalised immediately to protect our money David Rose, London, UK Send us your comments | HAVE YOUR SAY Northern Rock should be nationalised immediately to protect our money David Rose, London, UK Send us your comments |
| But it added: "That there can be no certainty that the discussions with interested parties will lead to an investment in or offer for the company, or for all or any part of its business." | But it added: "That there can be no certainty that the discussions with interested parties will lead to an investment in or offer for the company, or for all or any part of its business." |
| The bank, whose chief executive Adam Applegarth resigned on Friday, said that while it would still analyse and discuss proposals it had received, "the value to shareholders from any of the proposals remains highly uncertain". | The bank, whose chief executive Adam Applegarth resigned on Friday, said that while it would still analyse and discuss proposals it had received, "the value to shareholders from any of the proposals remains highly uncertain". |
| They would depend on factors including an improvement in market conditions such as access to liquidity, it said. | They would depend on factors including an improvement in market conditions such as access to liquidity, it said. |
| Options | Options |
| Northern Rock was forced to seek emergency funding from the Bank of England in September after the jamming up of world credit markets wrecked its business model. | Northern Rock was forced to seek emergency funding from the Bank of England in September after the jamming up of world credit markets wrecked its business model. |
| The government has a number of options when it comes to Northern Rock's future - it could let the bank go into receivership, seek a private buyer, or take it over itself. | The government has a number of options when it comes to Northern Rock's future - it could let the bank go into receivership, seek a private buyer, or take it over itself. |
| BBC political correspondent Norman Smith says no option has been ruled in or out by the Treasury, which will not say whether it wants the bank sold, whether it will provide more money, or whether taxpayers will get all their money back. | BBC political correspondent Norman Smith says no option has been ruled in or out by the Treasury, which will not say whether it wants the bank sold, whether it will provide more money, or whether taxpayers will get all their money back. |
| The Liberal Democrats have renewed their call for the bank to be nationalised, stabilised and then sold off, because they say the directors and shareholders have no interest in safeguarding taxpayers' money. | The Liberal Democrats have renewed their call for the bank to be nationalised, stabilised and then sold off, because they say the directors and shareholders have no interest in safeguarding taxpayers' money. |
| The Tories are also demanding assurances that taxpayers' money is being safeguarded. | The Tories are also demanding assurances that taxpayers' money is being safeguarded. |
| The Treasury has dismissed the idea of the government taking control of the bank at this stage. | The Treasury has dismissed the idea of the government taking control of the bank at this stage. |
| Meanwhile, Northern Rock's biggest shareholders are reported to have said the sale of the bank should be stopped. | Meanwhile, Northern Rock's biggest shareholders are reported to have said the sale of the bank should be stopped. |
| RAB Capital and SRM Global, two hedge funds that own 13% of the bank's shares, have reportedly argued that forcing a quick sale or break up of the bank would allow Northern Rock to be bought on the cheap. | RAB Capital and SRM Global, two hedge funds that own 13% of the bank's shares, have reportedly argued that forcing a quick sale or break up of the bank would allow Northern Rock to be bought on the cheap. |