Virgin Group yesterday submitted a reduced £1.2 billion (A$2.61 billion) bid to take over Northern Rock and rebrand it as Virgin Bank.
The bid proposes a cash injection of £500 million (A$1.08 billion) and a rights issue of £500 million (A$1.08 billion) priced at 25p (A$0.54) per share.
Virgin’s previous offer was £1.55 billion (A$3.37 billion).
“We have made a proposal that seeks to stabilise the company and rebuild it as a trusted and thriving institution under the Virgin brand with a long-term future,” said proposed executive chairman of Virgin Bank Sir Brian Pitman.
Meanwhile Northern Rock’s management also submitted a proposal to buy the bank. The proposal would combine a new equity raising of not less than £500 million, a reduction in the assets held on the company’s balance sheet and a reorganisation of its operations.
A statement released yesterday the Board of Northern Rock said it believes the restructuring proposal “will result in an independent, well-capitalised, low cost and significantly lower risk mortgage and savings bank. “
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