Cerberus has joined the Northern Rock takeover race, joining the Virgin-led consortium and JC Flowers in the running for the bank . Private equity company Cerberus is being backed by GMAC, in which Cerberus owns a 51% stake, with the other 49% owned by General Motors.
With AIG part of Sir Richard Branson’s Virgin led consortium, and JC Flowers reportedly setting aside £15 billion to buy the bank, Cerberus faces stiff competition in the race to secure the bank. Furthermore, the Bank of England recently revealed it rejected a request from an unnamed bank, believed to be Lloyds TSB, for a £30 billion loan with a view to purchasing Northern Rock.
Whichever bank is successful in buying the troubled mortgage lender, they must stabilize the finances quickly before the emergency loans from the central bank must be repaid. Northern Rock have now borrowed in excess of £20 billion in the last six weeks, loans which expire in six months leaving the new owners with a huge task on their hands.
Cerberus Joins Bank Takeover Race
Cerberus Joins Bank Takeover Race
Thu, 01 Nov 2007
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