A consortium led by billionaire Richard Branson is the government’s “preferred bidder” in an effort to rescue embattled UK mortgage lender Northern Rock, Bloomberg reports. Virgin Group says it will immediately pay back $22.5 billion of the $50 billion the Bank of England loaned Northern Rock to keep it afloat, and would inject cash into Rock through a stock offering.
Northern Rock would merge into Virgin Money, the personal finance branch of Virgin Group. The consortium promised additional funding for Virgin Money to take its value to $500 million in exchange for a stake of some 50-60%. Northern Rock shares soared 57% in trading today in London. “This stock is not for the faint-hearted,” cautioned one analyst.