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LONDON - The former head of British bank Abbey and veteran troubleshooter Luqman Arnold is preparing a move for lender Northern Rock which could avoid a sale or breakup, sending shares in the battered mortgage lender up as much as 11 per cent.
Arnold's investment company Olivant said yesterday that it planned to take a minority stake in Northern Rock and introduce a "core team" led by him to run the lender.
Under the deal to be put to Northern Rock's board, Arnold - also the former head of investment bank UBS - is expected to become chief executive, replacing Adam Applegarth.
Arnold's proposal, which is not an offer for Northern Rock's shares, comes just days ahead of a weekend deadline for bids for Britain's biggest casualty of the credit crunch.
His deal - the only one so far which would not entail a sale - will compete with offers from suitors including United States buyout firm J.C. Flowers and a consortium led by Sir Richard Branson's Virgin Group. Wall St powerhouse Cerberus is also interested, sources familiar with the deal have said.
Olivant declined to comment on the size of the minority stake, but the group could take up to 20 per cent, according to the Sunday Times, a stake worth about £130 million ($355.69 million).
- Reuters
