Newspaper article The Evening Standard (London, England)

Branson Stutters and Stumbles; "Dishevelled": Richard Branson

Newspaper article The Evening Standard (London, England)

Branson Stutters and Stumbles; "Dishevelled": Richard Branson

Article excerpt

Byline: JIM ARMITAGE

RICHARD BRANSON may have scuppered his Virgin bid to take over NorthernRock in a stuttering interview.

The Virgin boss was seen by City analysts as unconvincing as he was questionedby Jon Snow on Channel 4 last night.

Today Virgin was suffering embarrassment as its high-profile campaign to takeover the fallen bank appeared to be on the verge of failure.

Sir Richard had taken out a series of national newspaper advertisements andlobbied heavily in the City for backing for the take-over.

He had also secured valuable political support and preferred bidder statusall of which were vanishing today as Northern Rock gave equal access to itsbooks to rival bidder Olivant. Shareholders had always been opposed to theBranson bid, claiming it would have resulted in their stake in the businessbeing massively diluted.

Sir Richard was seen by analysts as failing to show a detailed grasp of thedifficulties of Northern Rock and glossing over the challenge of raising largeamounts of capital on the credit markets in the current climatewhich was what had led to the run on the bank. He appeared to lack confidencewhen he said: "I would hope it's better than 50/50" that his bid would win. Theinterview was crucial in this morning's loss of belief in the bid by Cityanalysts, who had initially believed Sir Richard had the political backing towin.

The Virgin bid needs at least [pounds sterling]12.3 billion[pounds sterling]11 billion to pay off the taxpayers' bill, and [pounds sterling]1.3 billion to inject into thecompany.

A consortium of three banks is providing the cash but the rival consortium isoffering to pay more money to taxpayers and shareholders.

The advantage of the Branson bid was based on Northern Rock becoming part ofthe Virgin brand, which was supported in Whitehall because the name would bringconsumer confidence.

THE TV INTERVIEW

WHAT Richard Branson said when interviewed on Channel 4 last night:

Jon Snow: What's the latest?

Richard Branson: We've always made clear that we have put up as a consortium[pounds sterling]1. …

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