any comments, thoughts, on this stock.

Northern Rock to meet JC Flowers for takeover talks


LONDON (Thomson Financial) - JC Flowers is to meet advisers of Northern Rock
for talks that could lead to the embattled bank opening its books to the private
equity group, the Financial Times reported.
Flowers, founded by former Goldman Sachs banker Chris Flowers, has secured
about 15 bln stg of funding that could be used for a takeover, the newspaper
claimed.
The private equity group is interested in keeping Northern Rock as a whole
entity and is understood to have received funding commitments from blue chip
banks, the FT said.
The cash could be used to refinance part of the estimated 20 bln stg that
analysts believe the bank will need to raise in the next year, the report said.
Northern Rock shares have lost more than 80 pct of their value since the
bank revealed on Sept 14 that this summer's global credit crunch had forced it
to seek emergency funding from the Bank of England.
On Tuesday night, the shares closed up 3.5 pence at 135.6 p amid market
rumours an unidentified party is preparing a rescue bid of 175 pence per share.
philip.waller@thomson.com

I think it will not sustain above 145p today.

i tend to agree hyleo, though my stop was hit (145) and i am now out with a very acceptable profit ...... there is certainly no indication that the shareholders will ultimately receive anything once all is unwound ..... indeed, i would not have been at all surprised had the NRK opened down by as much as it opened up! ...... anyway, no time to enter the fray in either direction for the moment, and perhaps not at all

Reference to hewittalan6 post 563, Mortgage Express is wholly owned by Bradford and Bingley.

it seems to me that, always subject to an unequivocal offer being put on the table, once sp gets above about 160 it becomes a progressively more interesting short.

I will still hang on to my short as I believe this will go back to 120p.

you may be right, but that's pretty brave or even foolhardy ...... for myself, i am happy to have banked my profit, even if cross with myself for trying to be just too cute and losing a large slab of potential profit ...... however, i would have though it ulikley that any bid will be greater than 175, which is why i suggested that shorting when sp is >160 becomes progressively more enticing, especially if nothing absolute is on the table at that time ...... it is not impossible for this to happen as there must surely be an awful lot of short positions closing by friday night

Cant see HMG giving any sort of guarantees to J C Flowers if they bid for NRK . If no other bids in the offing NRK is a dead duck and straight into receivership. Shareholders would in these circumstances end up as they usually do with nothing.IMHO.

that was certainly my logic for going short in the first place ....... however, there are so many unknowns at the moment that it is very difficult to call ...... i suppose the question is whether or not the upside is greater or less than the downside ...... i would guess that top is 175/190 and the downside zero or perhaps more realistically 50/100 ...... therefore at 150, the balance is quite balanced!

Agree but if you believe the amount required to fund NRK in order for them to survive over the next few months is 20billion who is going to pump in that amount without a government guarantee? The bounce has to be short covering before the final plunge.

maybe ..... am just contemplating my navel on this issue at the moment

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.