Business Echo FOR THE BEST COVERAGE IN THE REGION www.businessecho.co.uk The Northern Echo TUESDAY, NOVEMBER 27, 2007 NEWS IN BRIEF As stricken lender names Virgin as its preferred bidder: Christmas cheer for cheesemaker CHEESEMAKER Shepherds Rock shares rally,but Purse has secured a contract with supermarket chain Sainsbury’s to trial one of its cheeses over Christmas. The company, based in Thirsk, North Yorkshire, will see its investors want more Monks Folly cheese sold at 39 THE Sainsbury’s stores across the region during the festive period. The mould-rinded soft cow’s By Kate Bowman VIRGIN milk cheese is one of three Business Editor cheeses, including Olde York and Byland Blue, made by [email protected] OFFER Shepherds Purse from recipes inspired by monks in the Middle NORTHERN Rock’s share price ■ Virgin will repay £11bn of Ages. leapt yesterday after announcing the Rock’s loan from the Bank that a rescue team led by Sir of England. The Bank of CONTRACT WIN: Marketing Richard Branson’s Virgin Group England will also be given a agency Adessi, which has was its preferred bidder. “clear path” towards offices in Newcastle and The Newcastle-based mort- repayment in full. Middlesbrough, has won a gage lender confirmed it was now competitive pitch to provide PR ■ Virgin will put £1.3bn into in “accelerated” talks with the the business, while Virgin and marketing services to Virgin-led consortium, which specialist recruitment Money business will support plans to repay £11bn of the esti- Northern Rock. Half of the consultancy, Unity. Adessi, mated £25bn borrowed from the which was recently named money will come from the Bank of England immediately. consortium, with the North-East CIPR Agency of the However, the offer was met by Year, will handle a rebrand for remainder being raised opposition from Northern Rock’s through an offer to existing Unity and help expand the largest independent shareholder. business. Rock shareholders to buy new RAB Capital chief executive shares for 25p each. RETAIL AWARD: The JD sports Philip Richards said yesterday’s ■ The Virgin consortium will store in The Mall shopping events were a “step closer” to se- hold no more than 55 per cent centre, Middlesbrough, was curing the business, but contin- of the company once the presented with the Best Instore ued to press for a higher offer. transaction has been Branding award at the recent Mr Richards said: “We do not concluded. Visual Merchandising and believe that this proposal reflects ■ Northern Rock will be re- Display Awards in London. JD the true value of Northern Rock, branded Virgin, its stock moved to The Mall a year ago and we would expect either that market listing will be retained from its previous site in the this proposal be improved or that and the company will continue alternative proposals be brought town’s Linthorpe Road. DEMANDING ANSWERS: An investor at a meeting of small shareholders in Newcastle yesterday as a going concern without any forward which would combine a break-up of the business. SITE SALE: The former similar repayment schedule for ■ There will be no substantial Clariant manufacturing site in the Treasury together with im- The Northern Rock name customers, Sir Richard said he right solution.” Northern Rock job losses and the business will Darlington Road, proved terms for shareholders.” would also go as part of the pro- was hoping to bring about a would merge with Virgin Money continue to operate from Northallerton, North Yorkshire, RAB Capital’s opposition could posals, with the bank rebranded “fresh start” for the stricken as part of the deal, with Virgin Newcastle. has been sold to a Leeds-based pose a potential threat to the under the Virgin banner. bank. Money chief executive Jayne- ■ Northern Rock Foundation, a developer for £3.3m. The eight- deal. The group has already said Virgin plans to inject £1.3bn In the letter, Sir Richard said: Anne Gadhia appointed to lead charity established in 1997 acre site was put on the market it would block any deal that into Northern Rock in return for “Over the past two months, Vir- the group. when Northern Rock converted when it became “surplus to would not deliver value for a controlling stake in the bank gin has been working hard on a Virgin’s team confirmed it from being a mutual requirements” earlier this year. money for shareholders. and intends to retain most of its proposal to save Northern Rock would continue contributing to organisation, will continue to Clariant is a Swiss-based A letter was sent on behalf of 6,000 staff and continue operat- and rebuild its financial the Northern Rock Foundation – be supported from the profits chemicals company employing Northern Rock’s small share- ing the business from Newcastle. strength. I have been personally the single largest charitable of the company. about 21,500 people on five holders to company chairman The so-called “tripartite au- very committed to finding the benefactor in the North. ■ Virgin will make an continents. Bryan Sanderson yesterday to ex- thorities” – the Bank of England, Bryan Sanderson, who took additional payment of £10m in press fears that directors were the Treasury and the Financial over as chairman of Northern each of the financial years up AMEC WIN: Engineering and planning a “fire sale” of assets. Services Authority – are sup- Rock after Matt Ridley stepped to 2015 that the company’s pre- project management company Robin Ashby, a spokesman for porting the offer so far. down last month, yesterday wel- tax profits exceed £638m – the Amec, which has a base in about 100,000 Northern Rock A spokesman for Prime Minis- comed the deal as “very good aggregate of the profits of Darlington, has won a £13.5m shareholders, the majority of ter Gordon Brown said the bid ap- news” for the group. Northern and Virgin Money for deal to design facilities for the whom are based in the region, peared to meet Chancellor Alis- But the bank confirmed it was the past financial year – for a Atomic Weapons Establishment said: “The Virgin offer is good in tair Darling’s criteria of continuing to explore other op- maximum of five years. at Aldermaston, in Berkshire. parts, but I do not believe that protecting the taxpayer and de- tions as part of its strategic re- London-based Amec’s nuclear this is the best or the final offer. positors, while being consistent view. North-East, and as one of the business will carry out the The way the share price has with maintaining wider financial Virgin’s bid would need to se- greatest philanthropic bodies via work. jumped on Monday morning is stability. cure the backing of Northern its foundation, Northern Rock an indicator the market believes He said: “The Treasury has Rock investors, who have become holds an important position in Inside there is value in Northern Rock.” been making clear that they back increasingly concerned that a the regional economy. The deal for the troubled the Virgin bid on the grounds sale of the company could wipe “The staff of Northern Rock Business News......................2 lender – at the centre of the UK’s that it meets these three princi- out the value of their sharehold- have worked stoically through- Small Business......................3 first bank run for nearly 150 years ples.” ings. out the recent financial crisis. Law.........................................4 in September after soaring bor- Shares in Northern Rock James Ramsbotham, chief ex- They, together with the founda- Rural Affairs............................5 rowing costs forced it to seek surged on the back of the an- ecutive of the North-East Cham- tion, will eagerly look forward to having certainty of their fu- Commercial Prop.........8 and 9 emergency funding from the nouncement, at one stage climb- ber of Commerce, gave a cau- tures.” Personal Finance.................10 Bank of England – would see Vir- ing 42 per cent in morning trad- tious welcome to the bid. CASH CALL: Robin Ashby at Market Report......................11 gin Money and Sir Richard pay ing, closing up 24.2p at 110.1p. He said: “As one of the largest £200m. In a letter to Northern Rock yesterday’s meeting private sector employers in the Comment – Page 18 2 BUSINESS ECHO www.businessecho.co.uk TUESDAY, NOVEMBER 27, 2007 Exploring Committed to potential of developing the workforce Martyn life-saving Pellew THE Northern Echo’s parent company electronics Newsquest (North East) has demon- strated its commitment to staff train- ing and development by signing the THE potential development of Skills Pledge. Reducing electronic equipment that can Peter Barron, editor of The North- operate in extreme conditions ern Echo, and David Coates, managing and help save lives is being ex- director of Newsquest (North East), the risk of plored in the region. have backed the initiative, which aims Scientists at Newcastle Uni- to increase the skills levels of the na- versity are researching the effec- tion’s workforce. human tiveness of advanced electronic More than 50 North-East businesses devices and communication and organisations have now signed the techniques that can be used in Skills Pledge, which is supported by error space and at sea. the North-East Chamber of Commerce If the technology is proven, it (NECC) and the Confederation of USINESSES could be developed further in the British Industry (CBI). across the region North-East with the creation of James Ramsbotham, chief executive and, indeed, the hundreds of jobs. of the NECC, said: “A large and well- UK, must have The project, carried out at the known organisation like Newsquest B been rife with talk School of Electrical, Electronic signing up to the Skills Pledge sends this past week about the and Computer Engineering out a very strong signal about how missing Child Support Agency (EECE), will use silicon carbide committed it is to staff development.