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Monday, November 19, 2007

Clock Ticking For Rock

The Chancellor of the Exchequer, Alistair Darling, is seeking guidance from the European Union authorities in Brussels about how the £20BN Bank of England loan to Northern Rock can be extended without breaching the rules.

Meanwhile, Northern Rock's board met over the weekend to discuss the proposals it has received so far.

One is from Luqman Arnold's Olivant Group, which proposes to install its own management team in the bank, and the other from Virgin Group.

Rock revealed today that the bids are less than its share price; needless to say the price this morning fell like a stone, and was trading barely above £1 in early morning trade.

Northern Rock said:

"The value to shareholders from any of the proposals (and indeed any of the other strategic options available to the company) remains highly uncertain."

Shareholders have called on the Government to call off the auction, and are far from happy with the price.

However, realistically, what can they expect?

The company is dead, and has been destroyed by the board in a similarly reckless manner as the board of Marconi destroyed that once solid company.

The shareholders should focus their ire on the ex (soon to be ex) members of the board who did this, rather than the government.

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