This is Money- The biggest shareholders in Northern Rock are threatening to block a rescue package from Sir Richard Branson – and force nationalisation.
SRM Global and RAB Capital, the hedge funds which together own 19.68% of the bank, are said to be ready to oppose the bid from Virgin Group when it is put to a shareholder vote.
Virgin is offering investors a heavily diluted stake through a rights issue at 25p a share. SRM boss Jon Wood has taken legal advice and believes the Government must pay shareholders 400p a share, the book value of the bank, if it is nationalised, at a cost of £1.6bn.
‘We currently oppose the Virgin plan,’ said a source. ‘If it were a twoway competition between Virgin and nationalisation, we would vote for nationalisation.’
