Rock investors may get next to nothing
INVESTORS in stricken bank Northern Rock today faced the prospect of getting next to nothing for their shares after the Chancellor Alastair Darling's decision to nationalise the lender.
INVESTORS in stricken bank Northern Rock today faced the prospect of getting next to nothing for their shares after the Government's decision to nationalise the lender.
The bank's shareholders - including more than 100,000 small investors - could receive no compensation under plans to value Northern Rock on its worth without a Government guarantee, according to City experts.
Banking analysts said that the Government may yet decide to offer investors a payment to avoid a lengthy legal battle.
But any payout is still likely to leave shareholders nursing steep losses, with Northern Rock's value having plummeted from £5.3 billion this time last year to just £375 million.
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Shares, which were suspended from trading this morning, closed at 90p on Friday, a fraction of the 1226p peak seen a year ago.
Sandy Chen, analyst at Panmure Gordon, said: "The current shareholders will want to see some money out of their investments, but the financial reality is that shareholders are likely to get nothing.
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"Even with a Government guarantee, we thought shares were worth zero anyway."