January 15, 2008: Shareholders in Troubled Northern Rock Allow Management to Negotiate Sale of Bank

At a meeting with management, the largest two shareholders in the troubled British mortgage lender Northern Rock—hedge funds RAB Capital and SRM Global—put forward a proposal that will stop the bank’s management negotiating its sale without consent from its shareholders. The bank needs to be sold to a new owner because of problems it has encountered during the credit crisis, and both major shareholders are worried they will not get much for their holdings (see November 26, 2007 and Shortly Before December 25, 2007). However, the bank’s management argues that the proposal should be rejected, as it would make a sale harder, and the other shareholders follow their lead, opening the way for the bank to be sold. [BBC, 8/5/2008]