any comments, thoughts, on this stock.

and where does 20 billion come from?

GNI not allowing short positions on NRK

well IG certainly are as have just shorted 10,000 at 148.8 ...... figure downside is perhaps 2500 but upside 3 or 4 or even 5 times that

If GB is calling an Election, I doubt NRK will be dumped, since many shareholders are Upt'North - and were given de-mutualisatuion shares. That being the case, maybe there is a case to argue the Banks Consortium will just ease out the existing Execs with a sham-takeover. . .maybe giving shareholders the nominal value of the shares at privatation - does anyone know what this figure was? 2 perhaps, but convenient if it was closer to 1.50 - which appears to be the settled price at least until new rumours, etc.

Another alternative is to oust the Execs, and then raise the cash by a placing - probaly a less than cusrrent sp - so this would raise a slug of cash which soon would be forgotten as the sp rose....that is is the stupid public don't mind being shafted again!

I sold out at 1.50 - couldn't stand-by, watching my investment being trampled, obviously I had thought the sp was already low, but then the Market always knows best... Ahem.


However, if GB isn't calling an Election and he's just proding the Tories into giving away their plans - - - (( this is my best guess ))) - - - then NRK can be sacrificed and all will be forgotten, in a year or two . . . . why would GB risk losing, when he's waited TEN years for his PM-ship?


Finally, they could dilute existing shareholders and offer a bonus share to those that held from demutualisation ( most folk up North), so gaining Voters and shafting everyone else. These bonus-shares would be more valuable - but would not be immediately tradeable, etc.

Hangon your scenarios are all possible although I would have thought many "demutualisation" shareholders sold long ago, however it does not solve the suggested funding problem, who has 20 billion to pump into NRK and for what return.... risk v reward.

NRK are up to their heads in huge debts and I really can't see bidders at even 175p...totally not realistic. There is really not much to expect as the brand is dead in any sense. That is why LloydsTSB has smartly bail out of the bidding war.

Deutsche Bank has issued a profits warning. I mentioned them in post 386 as having a few problems. believe me, there are plenty more to come forward yet.
Alan

Lloyds wasn't so smart to hold a bundle of shares in nrk in the first place though

Citigroup ready to provide over 5 bln stg for Northern Rock takeover


LONDON (Thomson Financial) - Citigroup is ready to provide well over 5 bln
stg in financing to help fund a takeover of Northern rock PLC, The Times has
reported.
The newspaper said that at least four serious bidders, including JC Flowers
and Cerberus remain in the auction process, and are due to meet Northern Rock
management this week.
The American bank will offer the credit line to all bidders, in part secured
against Northern Rock's mortgage assets. Terms are still being finalised, the
newspaper said, but it is thought Citigroup will also provide some advisory
services to the troubled Newcastle-based bank.
Meanwhile, the Northern Rock Foundation yesterday launched a campaign to
stop the bank being sold off cheaply amid fears that a snap election could force
a quick deal, The Independent reported.
The Foundation, which is the largest donor to charity in the North of
England, has hired financial advisers and written to shareholder groups,
officials, ministers and other MPs to make the case for the Foundation's status
to be taken into account.
The organisation receives 5 pct of Northern Rock profits annually, worth 31
mln stg last year, and is entitled to receive 15 pct of the takeover price if
the bank is bought.

nrk on the way up rumour could hit 1.90 today on bloomberg

NRK staffs are apparently losing a big chunk of their pensions.

I am out of this one and will not be touching this stock ever again.

Halifax: - yes I agree some will have sold - but any remaining just go to proove that "Shareholders" aren't all bad wheeler-dealers. Some are little old ladies/gents with a small nest-egg (saved over many years) . . . . hitting them might prove difficult, politically under GB's Watch. Something the Press would like.
If GB had been the first Labour PM in years, then it's easy to blame the previous Government - - but he can't pull this stunt, especially as he started the BoE independence. That was why I suggested a sweetener for demutualisation Holders.(being a small number).

I agree also it will be difficult for any potential buyer to find the money - but not that difficult - at a Price. This begs the Q, if the Buyer gets a really Good Deal, they can afford to take a hit for a while ( maybe 4 years?), until the interest-rates improve . . . the danger being they will get worse and it will last longer . . . so the takeover price must reflect this in a discount. . . . .
My guess is that the Book-value is already maybe 10% discounted, at 1.80 - so how much lower does the Offer have to be to reflect the potential RISK and still show a profit?

. . . . . . . . Maybe that 1 suggested long ago, isn't too far wrong. . . . . .

- - For at that price, the Mortgage-Book is well-discounted and NRK Mortgagees appear to be fairly good ( as risks go), so the only groups to suffer will be the these:-

The Staff,
The shareholders
The Government ( who will have to provide a secret back-stop to get the deal going - IMHO!)
The Public (= us ) - that is, anyone that pays Tax + anyone with a Pension fund that has NRK-shares. [And as providers of Government money.]
Oh and any related NRK-loan-connected businesses, charities etc.

That is the probable Fall-out for not having a decent funding Policy in place (Management failure!), to maintain profits when interest-rates rise. . . . . last-time (in '90's), they rose to over 20% for a few months I recall - I wonder what NRK-Chief Exec would be telling Shareholders under those circumstances? - "...we're not bankrupt, yet..." - while he continued to draw a Salary that would make a thief blush.

Yet my guess is that had shareholders been made aware ( Freedom of Information, etc.) of these shortcommings, they would have been reluctant to approve the Annual Accounts and the Director's Salaries . . . .
- Which neatly brings us to the role of the FSA - in Corporate Governance review -I believe shareholders, by and large, have a more Public-Spirited view of Company-Accounts and do not like oodles of Spin and "Maybe's" still popular with many minor-Execs, of both FTSE and AIM-listed companies.


All IMHO, DYOR - the rise today provides some relief for the Brave, but I'd sold at 1.50 pity, eh?

I got rid at 1.70 and was happy to take a loss.

i was a stupid and greedy silly hbilly! ...... serves me right, but am now out having blown the profit i made on this stock

Don't worry, cynic, NRK will go back down...I am quite certain. It couldn't closed the day at 170p. It will break down soon.

Cynic, did the same. Must learn when to stop.

Northern Rock's asset quality remains good - Fitch


MUMBAI (Thomson Financial) - Fitch Ratings said Northern Rock PLC's asset
quality remains good and capitalisation sound, hence there is no fundamental
reason why coupons on hybrid capital instruments should be deferred or the
underlying instruments written down under any potential restructuring at the big
UK mortgage lender.
"Deferral triggers in such instruments are typically linked to regulatory
capital and distributable profit, neither of which ought to be under pressure
over the near-term," Fitch said.
Fitch said its view remains that a solution to Northern Rock's problems
which involves a sale of assets at materially discounted prices "is neither
necessary nor likely."
The rating agency reiterated its view that the company's problems are
funding-related, and while this is likely to feed through to earnings pressure
there remains no asset quality or solvency issues.
Northern Rock's loan book consists mainly of prime residential mortgages
that remain of good quality, broadly in line with that of its large UK mortgage
lender peers, the agency said.
TFN.newsdesk@thomson.com

NRK starting to fall back now, cynic...you were right about 160p being a big resistance. I think it will fall back to 120p soon. I really can't trust all this ratings as above as NRK was a BUY by so many brokers as the price was falling from its height of 1200p

Fund manager on Working lunch programme suggests holding on to these for the longer term ! Not convinced she is correct but then w.d.i.k.