any comments, thoughts, on this stock.

Think you might be in for a suprise.

High noon has passed...keep your ears on the ground.

Northern Rock Statement re Proposal




RNS Number:6504F
Virgin Group
12 October 2007


Press Release


For immediate release


"Virgin-led Consortium submits proposal to Northern Rock plc"


A consortium led by Virgin Group (the "Consortium"), has today submitted a
non-binding indication of interest ("Proposal") to the board of Northern Rock
plc ("Northern Rock" or the "Company") which, if consummated, will see the
Consortium inject substantial new equity into Northern Rock.


The Consortium includes:


* Virgin Group, a leading branded venture capital organisation, and
one of the world's most recognised and respected brands


* AIG Financial Products Corp., part of AIG, the international
insurance and financial services group


* WL Ross & Co LLC, the principal investment firm specialising in
restructurings, buyouts, and industry consolidations


* Toscafund Asset Management LLP, the international investment group
chaired by Sir George Mathewson


* First Eastern Investment Group, a leading Hong Kong-based investment
group


The Virgin Consortium, which has Sir George Mathewson as a special adviser, is
interested in investing in, and assisting in providing a continuing funding
solution to Northern Rock. It is the Consortium's intention to maintain Northern
Rock's listing, to retain the business in its entirety, to add to it and to grow
it in the future; rather than seeking a break up or partial solution. It is also
the Consortium's intention that the existing right of the charitable Northern
Rock Foundation to receive a proportion of the Company's profits be maintained.


The Consortium believes that beyond addressing Northern Rock's current liquidity
challenges, Northern Rock must seek a complete rebranding to repair its
franchise and the confidence of its stakeholders if it wishes to continue as a
standalone business.


The Consortium intends to capitalise on the strength of the Virgin brand, the
introduction of additional management and experience from the current Virgin
Money business, and the funding and liquidity solutions to be delivered by the
Consortium partners to rebuild Northern Rock's franchise on stronger
foundations. The Consortium believes that together with the Company it can bring
the business a renewed confident future for the benefit of all of Northern
Rock's current stakeholders.

As part of the proposal, Virgin Money will be transferred to Northern Rock in
return for equity; Northern Rock will, after completion of that transaction, be
renamed and rebranded Virgin Money. It is a complementary business, with an
established savings brand and a heritage in mortgages, and is a well-known
innovator in personal financial services. It is expected that the reconfigured
Virgin Money will quickly re-build a deposit base to drive a more sustainable
funding structure. In addition, a substantial cash sum will be injected into the
Company for new equity to be issued at a discount to the current share price,
which will improve the Company's capital position. These issues of new equity
would be conditional on the current shareholders approving a "whitewash" of the
provisions of Rule 9 of the Takeover Code, which would otherwise require the
Consortium to make a takeover offer for the Company's existing share capital.


The proposal is centred on the quickest possible solution to restore public
confidence in the business and return it to profitable growth. Virgin has close
to 100% name recognition in the UK with over 12 million brand customers in the
UK alone. It is consistently rated as one of the most trusted brands in the UK
and has a track record in personal financial services. Additionally, Virgin's
partners in the Consortium include major international institutions and highly
experienced investors in complex situations around the world.


It is proposed that the CEO of the combined business will be Jayne-Anne Gadhia,
CEO of Virgin Money and previously Managing Director of RBS Mortgages (where she
had responsibility for a mortgage book in excess of #65 billion). Prior to this
Jayne-Anne was Managing Director of the Virgin One Account both when owned by
The Royal Bank of Scotland and, before RBS' buyout of its joint venture, with
Virgin.


Commenting on the Proposal, Sir Richard Branson said: "I've always believed that
it's Virgin's role to improve things for customers through great value for money
products and services, innovation and great customer service - whichever market
we operate in. This has been evident in our financial service businesses both in
Britain and abroad. I believe that if we're successful we'll be able to create
an exciting new banking alternative for everyone in the UK. I and my team have
pulled together a heavy hitting consortium that we believe has not only the
knowledge and expertise but the financial clout to make a once great British
institution great again.


We have the opportunity to make a fresh start and build a renewed, confident
future for the business and its tremendous staff as a continuing independent
public company. We have confidence in the British economy going forward; and we
are determined to preserve one of the last remaining truly independent UK-owned
competitive forces in banking, mortgages and other financial services."


Commenting on the Proposal, Sir George Mathewson said: "I think the proposal
from Virgin is to the benefit of all stakeholders in Northern Rock. Virgin
provides an important point of stability and also has a recognised ability to
execute growth plans. I look forward to providing guidance and assistance in
building a strong new banking group."


The Consortium is being advised by Greenhill & Co International LLP
("Greenhill") and New Boathouse Capital, a subsidiary of Quayle Munro Holdings
("Quayle Munro Group").


This announcement does not constitute a commitment to proceed with the Proposal
or any other transaction in respect of Northern Rock and, in particular, it does
not constitute an offer for Northern Rock or an announcement of a firm intention
to make an offer under Rule 2.5 of the Takeover Code. Accordingly there can be
no certainty that the Proposal will result in any transaction or offer.


Greenhill is acting exclusively for Virgin Management Limited and for no-one
else in connection with the Proposal and will not be responsible to anyone other
than Virgin for providing the protections afforded to clients of Virgin or for
providing advice in relation to the Proposal or any other matters referred to in
this announcement.


Quayle Munro Group is acting exclusively for Virgin Management Limited and for
no-one else in connection with the Proposal and will not be responsible to
anyone other than Virgin for providing the protections afforded to clients of
Virgin or for providing advice in relation to the Proposal or any other matters
referred to in this announcement.

Contact details:

For more information contact:

Virgin Group Nick Fox - 020 7229 4738 / 07711 727 618


Greenhill & Co International LLP James Lupton / Edward Wakefield - 020 7198 7400


Quayle Munro Holdings Peter Norris / Andreas Wesemann - 020 7471 3770

M:Communications Nick Miles - 020 7153 1530 / 07796 171 667

This is a non-binding contract...good 'ol Branson is smart...he won't be losing his hard-earned money in NRK. Sp will come down.

Level II certainly interesting atm.

like the chart skinny .... let it be a lesson for any who want to dabble in NRK .... all totally but totally unpredictable, and the gyrations are truly wild

I am totally wrong today

almost impossible to be right except by pure chance .... my gut feeling would be to short at 300, but then i equally said i could not see anyone buying the charred remains in the first place!

Valuations these days are strange as I've alluded to before. buying highly leveraged outfits is acceptable fundamentals, which is why the ultra bears of 2-3 weeks ago were burnt. ;-0

A lesson for all methinks.

blimey, that's not a chart, it's the ECG of someone sneezing!

r u a doctor?

Branson to offer less than zero for the shares.....ie shareholders will have to pay him to bail out northern rock.

You are right, mitzy...


From The Sunday Times - October 14, 2007

Theres a chance Northern Rock is worth zero - John Waples, Business Editor

AS much as I would like to see a quick solution to Northern Rocks plight, I fear such a goal will be impossible. The farce surrounding the rescue of the stricken bank is doing untold damage to Britains reputation abroad, but there are now too many parties with entrenched interests to allow a quick deal to progress.

Sir Richard Bransons Virgin Group is the latest potential saviour, but the tough talking hasnt even started. Bransons proposal involves a huge dilution of existing Northern investors to under 50% of the companys equity and we dont even know what value he is putting on the shares yet.

Some of Britains smartest hedge funds have taken diametrically opposed views of the banks value. And there is a strong possibility that despite the takeover speculation that has pumped up the price to 273p, its real value could be close to zero. If an offer is made, an almighty tussle will break out between different shareholder factions.

In the end Northern might even be left on the shelf, close itself to new business and put its mortgage book into run-off. This would allow it to slowly repay the 13 billion government loan it has so far been handed. This week it is the Northern Rock boards turn to go before the Treasury committee.

More fingers will get pointed, but what we are discovering is Northerns collapse is not down to individual failing but a systemic one. And at the heart of it is the way the Bank of England, the Financial Services Authority and the Treasury have failed to get a grip on a problem that is exposing them to ever greater charges of incompetence every day this continues.

Incredible wheres all the money gone and massive dilution for the shareholders who will be left with 50p a share if anything..

Noted from yesterday's paper that Kasakhstan and Spain are on the brink of Northern Rockitis

The Spanish property market is in all sorts opf trouble i believe, not least because there is so much corruption and crookery involved in many of the developments - e.g. "free title" to your property actually not being so

Cynic,

I was thinking that 300 would be a price to short, as RAB has said they value it at 600 'ish. so your lost would be around 100 but the shares could fall to zero.

confess greed and adrenalin may persuade me to be foolish! .... very very bad logic as i would tell anyone else

In the words of UB40 - Only fools rush in. Anyone tempted by this atm should be treating it as a pure out and out gamble and only "betting" pin money.