Virgin's Rock Bid 'to Be Blocked'

[Vespasian]

http://news.bbc.co.uk/1/hi/business/7113766.stm

A main investor in troubled lender Northern Rock says that it will block a bid for the bank from Richard Branson's Virgin Group because it is too low.

Virgin was earlier named as Northern Rock's preferred buyer, a move that had been backed by the Treasury.

However, RAB Capital, which is the second-largest shareholder in Northern Rock, said it would oppose the move.

Should a takeover fall through, then the bank could be nationalised or put into administration.

RAB, which owns about 6.7% of the bank, told the BBC that Virgin's offer was "cheeky" and that the value it put on Northern Rock was "too low".

BBC business editor Robert Peston said that opposition represented "a major obstacle for Virgin and an embarrassment for the Rock board".

[Guest Charlie The Tramp]

A ploy to get Branson to up his offer, they are just whistling in the wind, Branson knows he has got them by the love grenades.

[The Ayatollah Buggeri]

RAB are gambling that Gordie & Darling won't dare to let NR go down the pan and into administration, because the 5,500 job losses in the north-east would be politically unpalatable. They must either think that a better offer will come along, or that plan B is to continue with the status quo indefinitely.

[The Colour]

This news has had no immediate effect on share price

http://uk.finance.yahoo.com/q/bc?s=NRK.L&t=1d

Edit: DOH is that the time already? Damn the day's just flown past.

Edited November 26, 2007 by The Colour

[Papitogrande]

Shame really, he did such a good job with the trains.

[Sheer Heart Attack]

RAB are gambling that Gordie & Darling won't dare to let NR go down the pan and into administration, because the 5,500 job losses in the north-east would be politically unpalatable. They must either think that a better offer will come along, or that plan B is to continue with the status quo indefinitely.

As an exiled Geordie, I disagree.

NuLab's grip on the North East is so complete that they'll win the area's seats even if they put a real donkey up as a candidate.

Because their support is pretty unbreakable, it's not a swing area so why the hell would they want to help the Geordies if they would get in anyway?

[Guest DissipatedYouthIsValuable]

Dissipated, who doesn't own any NR shares, was quoted as saying "Are you taking the ******ing piss? The only thing those share certificates should be useable for is to frame and hang on the wall to remind yourselves you were silly ****s for buying them."

Edited November 26, 2007 by DissipatedYouthIsValuable

[Lone_Twin]

I am seriously begining to believe that the majority shareholder in NRK is Montgomery Brewster.

.

ST

[Wudolf]

- if RAB wants to block an offer he needs to find some mates fast because he won't be able to with 7%

- if RAB wants to block a rights issue, and a deal that way would effectively be a reverse takeover, he needs to either a) find some mates or hope that nobody else votes in any shareholder resolutions approving the issue of the new shares

- if he makes enough noise the NR board may sweeten it a bit just to stop the hectoring from the sidelines.

It seems that RAB have likely been dun over. I can't imagine that they would ever do that to any company which goes to them asking for money.

The CEO has a long history of giving money to charitable causes and it is heartening to see someone blending their personal and professionals roles in such a way as to continue this laudable activity. Who said big corporates were heartless, shame on you.

Edited November 26, 2007 by Wudolf

[Bearback]

As an exiled Geordie, I disagree.

NuLab's grip on the North East is so complete that they'll win the area's seats even if they put a real donkey up as a candidate.

Because their support is pretty unbreakable, it's not a swing area so why the hell would they want to help the Geordies if they would get in anyway?

What would happen if a monkey challenged Labour in the North East?

[sambino]

Hmm so what happens to the share folders if it is nationalised ? As mentioned on tonights news

[The Ayatollah Buggeri]

As an exiled Geordie, I disagree.

NuLab's grip on the North East is so complete that they'll win the area's seats even if they put a real donkey up as a candidate.

As someone who worked in Newcastle from 2000-03, point taken but I still think this could be a factor. Agreed totally that Doug Henderson is unlikely to lose his seat, even if he's caught sodomising a goat on the top of Grey's Monument. But Tyneside did elect a Tory mayor, the Lib Dems are a major force on the council and there are a lot of marginal constituencies within spitting distance that will be affected if 5,500 jobs disappear in one fell swoop. A lot of those NR employees spend money which goes into the consumer economy of those constituencies, for one thing.

Labour's support is only unbreakable in the north-east as long as they maintain a reputation for jobs being created, not lost, on their watch. Big bad Maggie closed down the mines and put tens of thousands of people on the dole, thereby rendering the Tories unelectable in the north-east for a generation. If thousands of jobs are lost on Labour's watch as well, the effect for them could be equally as devastating: and Brown and Darling know that.

[Bossybabe]

What would happen if a monkey challenged Labour in the North East?

They'd hang it after finding it guilty of espionage, of course.

[Wudolf]

Hmm so what happens to the share folders if it is nationalised ? As mentioned on tonights news

If that happens the shareholders will find themselves sitting on rubber rings for a while.

[VacantPossession]

I don't understand the emphasis on all current news analysis with shareholders. If you buy shares in a company you are taking a risk which guarantees nothing, yet most media comments are citing the shareholders rather than depositors. If you deposit cash in a bank you have absolute priority. If you buy shares in a bank you take a calculated risk. The NR is not in a position to reject anything. If they reject Virgin and no-one else is interested, which appears to be the case, the shareholders will lose everything anyway.

VP

[silver surfer]

he has got them by the love grenades

[The Ayatollah Buggeri]

If they reject Virgin and no-one else is interested, which appears to be the case, the shareholders will lose everything anyway.

I think they're gambling that if they reject Virgin, the government will allow the status quo to continue indefinitely - in which scenario they'd lose not quite everything - rather than absorb the political and economic fallout from allowing NR to go down.

If you buy shares, you're buying a part of the company and with it the right to take part in decisions about its future. Ordinarily, that would mean risking everything if the company goes bust. But in this case, the Government's bailout makes the situation - to paraphrase Samuel L. Jackson in 'Pulp Fiction' after his encounter with The Gimp - 'pretty f***in' far from ordinary'.

[oracle]

I don't understand the emphasis on all current news analysis with shareholders. If you buy shares in a company you are taking a risk which guarantees nothing, yet most media comments are citing the shareholders rather than depositors. If you deposit cash in a bank you have absolute priority. If you buy shares in a bank you take a calculated risk. The NR is not in a position to reject anything. If they reject Virgin and no-one else is interested, which appears to be the case, the shareholders will lose everything anyway.

VP

You're absolutely right.

It seems today that people just want the rewards without fully understanding the pitfalls,and whinge like mad if they don't get their own way.People really do need to grow up.

If you put your life savings to win on the "sure thing" in the grand national and it comes in fourth,you LOSE.End of story.If you go back to the bookies demanding your money back they will just laugh at you.

[sunonmars]

You're absolutely right.

It seems today that people just want the rewards without fully understanding the pitfalls,and whinge like mad if they don't get their own way.People really do need to grow up.

If you put your life savings to win on the "sure thing" in the grand national and it comes in fourth,you LOSE.End of story.If you go back to the bookies demanding your money back they will just laugh at you.

Oh dear looks like the Govt has got a major headache after being so cocky about selling it off. Brown must be pissed, probably chucking stuff round No 10

[Dr House]

Is it me or is seeing Branson's obscene monkey grimace next to Applegit's bald head and Darling's eyebrows reminder of the fact that we have slipped into a nation run by fools, frauds and scoundrels? Seems almost poetic. Enter The Penguin, stage right.

[Fishy]

Surely if they allow it to go into administration, the receivers will just sell it off to the 1st and only bidder? i.e. RB?

Does anyone know what the legal position is when a company goes into administration? I wouldn't imagine the shareholders get to decide anything - wouldn't it be the debtors deciding? (i.e. GB)

[The Ayatollah Buggeri]

Surely if they allow it to go into administration, the receivers will just sell it off to the 1st and only bidder? i.e. RB?

Not RB as in 'the poisons are hatching out of the mud', surely?

Does anyone know what the legal position is when a company goes into administration? I wouldn't imagine the shareholders get to decide anything - wouldn't it be the debtors deciding? (i.e. GB)

While the business is still nominally afloat, shareholders can vote on whether or not to accept a takeover deal. I suspect that in this case, they're threatening not to in order to force the hand of the Government, which has effectively lent NR the mother of all unsecured loans without becoming a shareholder itself, and is therefore in a politically vulnerable position. The shareholders know that if Gordie and Darling pull the plug, bang goes £25bn, 5,500 jobs and any vestige of economic credibility they may once have had.

However, if and when NR does actually become officially insolvent and administrators are called in to salvage what value they can from it, those administrators don't have to sell a business as a going concern if they think they can raise more money by liquidating it instead. I imagine that this is what'll happen here: the relatively safe components of the mortgage book will be sold for some hard cash (though not nearly as much as the BOE have ploughed in), and presumably paying off the BOE will take priority. If the beardy RB then wishes to buy the toxic waste that remains, I can't see anyone standing in his way.

[the end is a bit nigher]

I am seriously begining to believe that the majority shareholder in NRK is Montgomery Brewster.

.

ST

Montgomery Burns

[Guest Charlie The Tramp]

Branson`s Spokeswoman on BBC News.

Shareholders will receive no dividends until the Taxpayers money is repaid in full.

No wonder they are opposing the deal.

[The Ayatollah Buggeri]

That's as good as pulling out - Branson must know full well that making such a statement is to guarantee that the shareholders will reject his 'offer'. Presumably he is looking for a way of pulling out while saving face, and this is it.