Northern Rock: The Bidding Heats Up

by: Felix Salmon

If Chris Flowers thought he was going to have little competition in his quest to buy Northern Rock (OTC:NHRKF), he's been comprehensively disabused of that notion at this point. The Virgin bid might sound a bit lightweight (a rebranding to Virgin Money), but it's backed by AIG, which gives it serious heft. And now it turns out that GMAC has joined the Cerberus bid – not necessarily surprising, given that Cerberus owns GMAC, but formidable all the same.

Against that competition, Flowers's bid almost looks like the lightweight of the bunch: he has some first-rate executives lined up, but less in the way of copper-bottomed financial sponsors. Expect a fully-fledged takeover battle.