JC Flowers pulls out of Northern Rock deal

Northern Rock suitor JC Flowers has walked away from the bidding battle to secure a rescue plan for the troubled mortgage bank, it emerged today.

The US private equity firm, which had been seen as a strong rival to the Virgin-led consortium, pulled out after struggling to find a way of providing value for Northern Rock shareholders and satisfying the Government.

However, the Olivant team, headed by former Abbey chief Luqman Arnold, today firmly ruled itself in the race to buy Northern Rock, as it tabled a formal proposal to take control of the struggling lender.