Virgin Group losing ground in bid for bank

LONDON, Feb. 4 (UPI) -- Virgin Group may be losing the edge in its effort to buy British bank Northern Rock as the deadline for bids approaches, the Daily Telegraph reported Monday.

Virgin downgraded its capital offer from $2.58 billion to $1.99 billion and the bank has failed to convince its shareholders to back an offer, the report said.

Former Chief Executive Officer of insurer Resolution Paul Thompson, who would keep much of Northern Rock's managerial team in place and Olivant, headed by Luqman Arnold, are said to be strengthening their positions in separate attempts to bid on the bank.

Thompson may be hurt by the government's desire to break away from Northern Rock's current team, however, the report said.

On Jan. 21, Downing Street stepped in with a plan to convert $47.08 billion in Bank of England loans into government-backed bonds to rescue Northern Rock from a crisis in mortgage related write-downs.