AN American private equity group criticised for its involvement with a troubled care home company is considering a £1bn bid for nationalised lender Northern Rock.
Blackstone, headed by billionaire Stephen Schwarzman, is hoping for a repeat of its successful investment in BankUnited of Florida, which it acquired with partners at the height of the financial crisis, according to reports yesterday.
The firm has come under fire recently over its involvement with Darlington-based Southern Cross, Britains biggest care homes operator, which is struggling to avoid administration.
Blackstone took control of Southern Cross in 2004, for £162m. In July 2006, the company was floated on the London Stock Exchange for £423m, with Blackstone selling its remaining stake in 2007.
The equity company has been accused by the GMB union of supporting a business model that left Southern Cross with an unsustainable rent bill - accusations which Mr Schwarzman rejected.
It is understood that details on the proposed sale of Northern Rock could be issued to potential bidders within the next ten days.
Blackstone could bid alone for Northern Rock, which is said by experts to be worth little more than 1bn, or ally itself to another bidder.
But Mr Schwarzman faces intense competition, with Virgin Money, National Australia Bank, the Coventry and Yorkshire building societies, investment groups NBNK and Olivant, as well as Tesco Bank, in the running.
Chancellor George Osborne announced his intention to auction Northern Rock in his Mansion House speech earlier this week.
Northern Rock was nationalised in February 2008 after it collapsed amid the credit crisis, sparking the first run on a UK bank for 150 years.
The Government split Northern Rock in two last year, forming a mortgage and savings bank called Northern Rock Plc and Northern Rock Asset Management (NRAM) to house the more toxic loans.
It is the former half - the so-called good bank - which is preparing to return to private ownership.
Earlier this year, the Government launched a tender for advisers - won by Deutsche Bank - to look at options for Northern Rock, including a possible sale.
A buyer of Northern Rock could also acquire the 600-strong branch network being sold by Lloyds.
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