Northern Rock bank reports fresh offers

LONDON, Nov. 21 (UPI) -- Northern Rock PLC shares closed down 13 percent Wednesday after the struggling British bank said it received a takeover bid proposal below its market value.

The Newcastle, England, bank -- hurt by the spillover from the U.S. subprime-mortgage financial crisis -- said the Tuesday proposal was the second in two days that was "materially below" the bank's $841 million market value.

It said it also received other potential bids it did not identify.

The bank received a bid from U.S. private-equity firm J.C. Flowers & Co. Monday, and from a consortium led by Richard Branson's Virgin Group Ltd. and London investment firm Olivant Advisers Ltd. last week.

London's Sunday Times reported U.S. financial-services group GMAC, formerly known as General Motors Acceptance Corp., was involved in a bid led by U.S. private-equity firm Cerberus Capital Management LP.

GMAC and Cerberus declined to comment.

Flowers and Virgin each propose $2 billion in equity recapitalization.

Flowers would keep the Northern Rock name and repay $31 billion of an estimated $51.5 billion emergency loan the bank received from the Bank of England in September to help fund its loans.

Virgin would rebrand the bank as Virgin Money and pay $21 billion back to the central bank.