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NBNK thought to have jonined battle for Northern Rock

Robyn Hall

October 19, 2011

A bid by the British investment company raises the possibility that it will try to combine Northern Rock with the 632 Lloyds branches being sold to create a formidable competitor to the high street banks.

NBNK is headed by Gary Hoffman, former chief executive of Northern Rock. As part of his exit terms from Northern Rock, Hoffman was barred from making a bid for Northern Rock before 1 November.

Reuters sources said Hoffman had asked Northern Rock and UK Financial Investments, which oversees Britain’s state-owned banking assets, for the ban to be lifted early so he could make a bid, and both parties had agreed.

He previously told The Financial Times that if NBNK were allowed to look at making a bid for Northern Rock, it would do so.

Hoffman and his team have been preparing an offer for “some weeks” and are expected to be able to table a bid by the end of this month, The Mail on Sunday revealed at the weekend. That would bring NBNK up to speed with Virgin Money and JC Flowers.

The sale of the bank is expected to raise about £1bn.

NBNK has already tabled a £1.5bn bid for the branches being sold by Lloyds Banking Group, under orders from the European Union.

Stephen Smith, director housing & external affairs at Legal & General, said: “Whilst this clearly remains a rumour, Gary Hoffman would bring a major benefit of actual hands on banking experience, we would view this positively.”


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