Olivant now equal to Virgin in Rock battle

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The Independent Online

Olivant won equal status with Sir Richard Branson's Virgin Money consortium last night in the battle to take control of Northern Rock.

After meetings with Northern Rock's board, the bank's advisers and the tripartite authorities, the private investment company was granted equal access to Northern Rock's books, management and funding banks.

Olivant, headed by the former Abbey National boss Luqman Arnold, had threatened to pull out of the bidding by today if it did not get equal status with Virgin, which was named as preferred bidder nearly three weeks ago. Its main complaint was that it was being blocked from having full discussions with Citigroup, Royal Bank of Scotland and Deut-sche Bank, which have been lined up to fund potential bidders.

Now that it has equal status, Olivant has withdrawn its demand that Northern Rock should recommend a bidder by Christmas. Mr Arnold is now happy to work to Northern Rock's timetable of making a decision in January.

Northern Rock is expec-ted to make a Stock Exchange announcement today confirming its two suitors now have equal status.

Northern Rock yesterday replaced Adam Applegarth, the chief executive who steered the bank to its doom, with an insider who was kicked off the board less than a month ago. Mr Applegarth left the stricken mortgage lender with a payoff said to be less than half his annual salary of 760,000. His place was taken by Andy Kuipers, who had been responsible for sales, marketing and prices.

The 45-year-old Mr Applegarth had been due to remain in his job until the end of January, but it was claimed the board wanted to install someone who could stay on to provide continuity if the bank were bought.

Bryan Sanderson, Northern Rock's recently installed chairman, ejected Mr Kuipers and other executive directors from the board soon after his arrival to streamline decision making.

Mr Sanderson said: "I am delighted that Andy has rejoined the board as chief executive. I am confident that he is the right person to help manage the company through the strategic review process."

Northern Rock issued a trading statement yesterday saying it expected to write down 281m of treasury investments in structured investment vehicles and collateralised debt obligations.

Mr Kuipers, 49, joined Northern Rock in 1987 and became an executive director in 2005. The bank said Mr Applegarth's payoff would be paid monthly and any other money he earned would be deducted from the bank's payments to him.

Northern Rock's shares slumped 13.3 per cent to 86p.