The ongoing rehabilitation of Northern Rock

According to yesterday’s papers, we could be about to see another twist and turn in the ongoing rehabilitation of Northern Rock. The former building society – which listed on the London Stock Exchange in 1997 and then found itself in the undignified position of being the first British bank to have a run on it in 150 years, only to be bailed out and duly nationalised by the British Government in February 2008 – is now being linked with another possible flotation.

Speculation had been mounting since the beginning of the year that the British Government was ready to step back from Northern Rock and last week George Osborne, the British Chancellor, announced that a sale timetable had been drawn up.

At the moment the only speculation in the press in relation to potential buyers seems to be Virgin Money and the banking arm of Tesco, but analysts aren’t ruling out a potential private equity buyer or a possible IPO if buyers for Northern Rock prove hard to come by.

According to sources close to the deal, a listing would be a fall-back position should trade or financial sponsor interest not provide the desired exit for the British Government, thus imagine the irony if within the next year Northern Rock ended up a public company once again.