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November 16, 2007 |
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NORTHERN ROCK: Court Issues Limited Injunction on Leaked Memo Northern Rock Plc has obtained an injunction from the UK High Court restricting publication of the information contained in a confidential memorandum sent to parties with a potential interest in the company, which has been leaked to a newspaper group. The Company believes that further speculative reporting based on the illustrative information in the memorandum may jeopardize the complex discussions and negotiations taking place in connection with its strategic review, the bank said in a statement. It has been reported that the memorandum included certain illustrative transaction structures and financial information prepared in connection with the Company's strategic review. As was made clear by the memorandum the financial information was prepared solely to illustrate the potential financial impact of these transaction structures on the Company's business. None of the information reported as being in the memorandum should be viewed as guidance to the market as to future outcomes of the strategic review or as an accurate representation of future results. The memorandum was not prepared with a view to public disclosure or in compliance with rules, guidelines or policies relating to public disclosure. Announcements regarding the outcome of the strategic review will be made as and when appropriate and any information that is material will be published at that time. There can be no certainty that the discussions taking place with interested parties will lead to an offer for the Company or for all or any part of its business. The Company confirms that the existing deposit guarantee arrangements announced by HM Treasury and the revised facilities agreed with the Bank of England announced on Oct. 9, 2007, remain in place. Bidders As reported in the Troubled Company Reporter-Europe on Nov. 13, 2007, Luqman Arnold, the former CEO of UBS AG and Abbey National Plc, has confirmed reports that it is preparing a bid for Northern Rock Plc through his boutique private equity firm, Olivant, in exchange for a minority stake in the troubled mortgage lender. Northern Rock's advisers had set a Nov. 16 bidding deadline although the Bank of England and the Treasury gave the bank until February 2008 to find a buyer. The bank's financial advisors include The Blackstone Group LP, Merrill Lynch International and Citigroup Global Markets Limited. As reported in the TCR-Europe on Nov. 2, 2007, Northern Rock confirmed that it is continuing to work with a number of third parties, and has developed further structures which allow it to seek additional expressions of interest from other parties, as part of its review of all strategic options. Three possible buyers are currently performing due diligence on Northern Rock: -- J.C. Flowers & Co., which recently confirmed that it is holding talks over a possible offer. J.C. Flowers has also secured a management team, which it intends to appoint to run Northern Rock in the event of a successful offer; -- Virgin Group Ltd., which bidding consortium includes American International Group Inc., WL Ross & Co., Toscafund Asset Management LLP, and First Eastern Investment Group; and -- Cerberus Capital Management LP, which according to reports has the backing of GMAC, in which the firm controls a 51% stake. Jane Croft and Jamil Anderlini wrote in the Financial Times last week that Northern Rock reportedly sought 50 potential Asian banks, including Industrial and Commercial Bank of China and Bank of China, to try to gauge interest on a possible sale of the mortgage lender, a restructuring or a combination of both. Private equity groups and banks from Britain, Europe, China and India, as well as building societies were also named as potential bidders. About Northern Rock plc Headquartered in Newcastle upon Tyne, England, Northern Rock plc -- http://www.northernrock.co.uk/mortgages/ -- is currently the 5th largest UK mortgage lender, the largest financial institution based in the North East of England and one of the most cost efficient UK mortgage lenders based on key performance ratios. The company had more than US$200 billion in assets at the end of June 2007. * * * As reported in the TCR-Europe on Sept. 28, 2007, Standard & Poor's Ratings Services placed its 'A-/A-1' counterparty credit ratings on U.K. bank Northern Rock PLC on CreditWatch with developing implications. At the same time, the 'BBB' subordinated, 'BB' junior subordinated, and 'A-' senior unsecured debt ratings were placed on CreditWatch with developing implications. |
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