Rock on ice as bidder takes its time

It will be weeks before a formal offer for Northern Rock from JC Flowers emerges as it is completing a due diligence exercise, a spokesman for the US private equity business has told The Independent on Sunday. But it is highly likely that, if a bid were successful, JC Flowers would opt for a complete takeover of the high-street bank.

A rival consortium, led by Virgin Group, has proposed injecting £1bn to £1.5bn into Northern Rock in return for a controlling stake, but it has said it would keep the shares public. JC Flowers, by contrast, has a track record of taking European public companies private.

To date, JC Flowers has invested over $6bn (£3bn) across more than 15 transactions in the financial institutions sector. On Friday, it confirmed it was in talks with Northern Rock and that it had put together a heavyweight management team led by former Marks & Spencer chairman Paul Myners and Richard Pym, the former chief executive of Alliance & Leicester.