SPECULATION was rife last night that the bidder for van hire group Northgate is financier Guy Hands.

Mr Hands' investment company, Terra Firma, has been suggested as the mystery suitor behind an £800m takeover bid for the Darlington company.

Analysts had speculated that GE Capital was the bidder, but rumours in the City now point towards Mr Hands, who also runs the Hand Picked Hotels group, owners of Crathorne Hall, in Yarm, near Stockton, and Wood Hall, near Wetherby, near York.

National newspapers have also reported that Mr Hands plans to buy the vehicle leasing business at Sunderland-based transport company Arriva, which would be combined with Northgate if both bids were successful.

Mr Hands would only comment: "I cannot say anything for obvious reasons."

Last Tuesday, shares in Northgate climbed by nearly 20 per cent after confirmation it had received an approach - but the company would not say who the bidder was or how much the bid was for.

However, the bid is believed to be £12.50 a share, which values the company at more than £800m.

Analysts believe the price may undervalue the group, which has seen steady growth and acquisitions in Spain in the past few years.

It is this European expansion and string of positive trading statements that it is believed has caught the eye of suitors.

Northgate started from founder Alan Noble's home, in Hurworth, near Darlington, in 1981. It is now the market leader in the UK and Spain, with 2,000 employees, including 350 in the North-East.

Arriva has already confirmed that it would consider selling its leasing business for the right price.