2.19 After the initial attempts to find a buyer failed, Northern Rock put in place a new sale procedure designed to create and maintain competition from a range of potential buyers for all or parts of the business. While the sale of the whole company remained the main priority, a sale of part of the business was also explored, albeit as a secondary option. The company appointed Citigroup Global Markets Limited from September 2007 to work alongside Merrill Lynch. The strategy adopted was to:
■ ask for expressions of interest from potential buyers;
■ provide sufficient information to those expressing interest for them to submit non-binding first-round bids;
■ select from the bidders a limited number of parties to participate in a second round of bidding which would lead to an agreed transaction.
2.20 A staged process along similar lines has been used many times in the past by departments to privatise public sector organisations. Appendix 7 compares the sale process with good practice published by the Treasury and the Committee of Public Accounts, based on previous sales by government departments. Figure 7 sets out a chronology of key events.