It looks like Richard Branson’s Virgin Group has won the British government’s support to buy Northern Rock. Why I have no idea.
I mean, Northern Rock does need to be nationalised or have a private buyer come forth. But the consortium led by Branson has no major banking/mortgage experience. Thus why the government would back them is beyond me. Also, to throw support behind Branson when there are other interested parties who have not yet showed their hands is puzzling.
Maybe with the BILLIONS invested the government just wanted someone to take it off their hands. Whatever the case, I hope the deal is structured in such a way that taxpayers will get back most if not all of their money — sooner rather than later. However, something tells me that if this bank ever bounces back, the consortium will be first in line for a payoff. Such is the world of private equity.