Slaughters joins Northern Rock saga

Slaughter and May

is the latest City firm to be enlisted into the saga of Northern Rock.

The top 10 firm is representing the Treasury and the Financial Services Authority (FSA) on their advice to the beleaguered mortgage lender, which has turned to Freshfields Bruckhaus Deringer.

It is also understood that Cerberus is one of the as-yet unconfirmed parties
that is mooting a bid for Northern Rock. The Lawyer understands that the
US private equity house has turned to longstanding advisers Ashurst but
the firm declined to comment.

Corporate partner and former New York head Giles Boothman manages the
Cerberus relationship at Ashurst. He did not return calls for comment.

Freshfields plumped for Northern Rock – for which it has done some securitisation work in the past – over its more regular client the Bank of England.

The news comes as Northern Rock has scrapped plans for a £60m dividend pay out, waiting instead to see if any potential bids come to fruition.

Northern Rock last night announced that it had received preliminary approaches from a number of unnamed parties, of which Cerberus is predicted to be one. Revelations of the approaches has caused Northern Rock’s share price to leap 14 per cent overnight.

One name that has been floated in the press is controversial Spanish businessman José María Ruiz-Mateos, who told the bank last Friday (21 September) that he wanted to buy a controlling stake in it with other Spanish investors.

Slaughters will work with Goldman Sachs on options the Treasury and the FSA could present to Northern Rock.