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Report: Flowers Bids for Northern Rock

The private-equity firm is interested in the troubled U.K. mortgage lender, <I>Dow Jones</I> says.
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Private-equity firm

J.C. Flowers & Co.

has made a bid for troubled U.K. mortgage lender

Northern Rock


Dow Jones Newswires

reported, citing a source familiar with the deal.

The deal includes a 15 billion pounds ($30.75 billion) debt finance intended to repay the

Bank of England's

loan to Northern Rock and more than 1 billion pounds ($2.05 billion) in new equity, according to

Dow Jones

. J.C. Flowers also wants an ongoing facility from the Bank of England that would not exceed the 10 billion pounds ($20.5 billion) remaining from the 15 billion pound payment through 2010,

Dow Jones


Northern Rock declined to comment on the report Tuesday, according to

Dow Jones

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. On Monday, the bank issued a statement saying it had begun discussions with parties interested in investing in or acquiring parts of the business. So far, the bank said, those proposals have been inadequate.

The Bank of England in September stepped in to

bail out Northern Rock, after the lender was unable to finance its money market operations and lines of depositors descended on bank branches. The scene was similar to the run on

Countrywide Financial


in California, before the U.S. mortgage lender received a

$2 billion infusion of capital from

Bank of America

(BAC) - Get Bank of America Corporation Report

in August.

Mortgage lenders have taken a beating recently. The quasi-governmental U.S. mortgage giant

Freddie Mac


on Tuesday posted a

$2 billion third-quarter loss, just a week after sister company

Fannie Mae



plummeted on a


magazine report questioning the way it reported its credit losses.

If J.C. Flowers is about to make a bid for the bank, it would come just months after it abandoned a deal for another lender amid the credit crisis. The firm in September

backed out of a $25 billion deal to buy student loan provider

Sallie Mae

(SLM) - Get SLM Corporation Report

. Sallie has taken J.C. Flowers to court to keep the deal alive.