Financial analysts watching events have stated that a maximum of 20 investment banks will be competing to bring Britain’s Northern Rock back to being a privately owned firm. Those acquainted with the issue explained that the allure is based on the prospect of future large government mandates when the firm is privatized.
The government agency that owns the British holdings in banks set the deadline at 1700 GMT Monday for corporate finance advisors to come up with new ideas for Northern Rock. Some of those ideas are expected to include either a trade sale or a return of the venerable investment bank back to the stock market. Three years ago Northern Rock was nationalized as a response to the British financial crisis. Now that the crisis seems to be over the government is ready to release Northern Rock back into private hands, the only question is “How best to do it?”
The investment bank with the best idea for Northern Rock will win the mandate, and even more enticing, the chance at further mandates for other banks, such as Lloyds and RBS in the future. The winner should be announced within a month of Monday’s deadline.