Northern Rock shares plummet

LONDON – Shares in troubled British bank Northern Rock fell heavily yesterday, reversing earlier gains amid uncertainty over the group’s future after two major shareholders cut their holdings.

Meanwhile, British banks HBOS and Lloyds TSB do not intend to bid for Northern Rock, Thomson Financial News reported Wednesday quoting sources familiar with the situation. Shares in the bailed-out mortgage lender tumbled 8,82 per cent to 279 pence in late morning deals after earlier touching as low as 246,25 pence.For its part, Northern Rock said in separate filings on Wednesday that its two biggest shareholders, Lloyds TSB and Scottish asset management company Baillie Gifford, had reduced their holdings.The news stoked fresh market speculation over any potential takeover of Northern Rock, analysts said.Britain’s fifth largest mortgage lender had been hit with a wave of withdrawals by nervous depositors earlier this week on news that it had to be bailed out by the Bank of England, victim of a global credit squeeze.”In terms of any potential fire sale, the rumour currently circulating is that it is going to be at a lower level than the share price as is,” said Richard Hunter, analyst at brokerage Hargreaves Lansdown.”My intelligence is that there are rumours circulating in the market that Lloyds TSB were prepared to pay no more than 2,0 pounds a share for Northern Rock, and HBOS 1,0 pound a share.”However, both Lloyds TSB and HBOS said separately that they had no intention of buying Northern Rock, according to sources questioned by Thomson Financial.He added: “The best outcome for Northern Rock – the brand having been damaged in the way it has – would be to be acquired.”Nampa-AFPShares in the bailed-out mortgage lender tumbled 8,82 per cent to 279 pence in late morning deals after earlier touching as low as 246,25 pence.For its part, Northern Rock said in separate filings on Wednesday that its two biggest shareholders, Lloyds TSB and Scottish asset management company Baillie Gifford, had reduced their holdings.The news stoked fresh market speculation over any potential takeover of Northern Rock, analysts said.Britain’s fifth largest mortgage lender had been hit with a wave of withdrawals by nervous depositors earlier this week on news that it had to be bailed out by the Bank of England, victim of a global credit squeeze.”In terms of any potential fire sale, the rumour currently circulating is that it is going to be at a lower level than the share price as is,” said Richard Hunter, analyst at brokerage Hargreaves Lansdown.”My intelligence is that there are rumours circulating in the market that Lloyds TSB were prepared to pay no more than 2,0 pounds a share for Northern Rock, and HBOS 1,0 pound a share.”However, both Lloyds TSB and HBOS said separately that they had no intention of buying Northern Rock, according to sources questioned by Thomson Financial.He added: “The best outcome for Northern Rock – the brand having been damaged in the way it has – would be to be acquired.”Nampa-AFP