The two are expected to submit the most credible proposals for acquiring the Rock by this week’s first-round bid deadline.
The Mail on Sunday reported Coventry has been in talks with the Financial Services Authority about acquiring the State-owned bank and is thought to receive the backing of major institutions in recent days.
The proposal from the building society includes the creation of a class of core tier-one shares and a loss-absorbing capital instrument.
The bid is expected to be tabled later this week, following their acquisition of Egg.
Virgin has not released details on its funding structure yet, however American billionaire Wilbur Ross, known for restructuring failed companies, has pledged £500m to back Virgin’s bid for Northern Rock.
Virgin’s bid follows its failed attempt to acquire branches from Royal Bank of Scotland last year, and are thought to have diverted its focus from attempting to buy Lloyds Banking Group’s branch network to concentrate on the rock.
Virgin money declined to comment.
More to follow...
