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U.K. Treasury Favors Virgin in Northern Rock Talks

The U.K. Treasury said the bid by billionaire Richard Branson’s Virgin Group Ltd. to acquire Northern Rock Plc is stronger than another put forward by the mortgage lender’s management team.The government department is in “active” talks with Virgin, although it hasn’t ruled out the management offer, a Treasury spokesman said today. Nationalization of the bank also remains an option, the spokesman added.

Northern Rock, which was bailed out by the Bank of England in September, “continues to engage with the authorities regarding our proposal,” Brian Giles, a spokesman for the Newcastle, England-based company, said in an interview today. Virgin “remains in constructive discussions” with the central bank, government and regulators, spokesman Nick Fox said.

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