Making a killing

Virign says it won’t make a killing from buying Northern Rock. But either it is being disingenuos - or the market is mad. Rock’s current share price of 100p implies a £600m paper profit for Sir Richard Branson and his consortium. Given that all they are putting in is £500m of cash and Virgin Money, a business with book value of £35m, that pretty much constitutes a killing. Look at the maths. Current shareholders are sitting on 421m shares that have a market value of £421m. They’ll get to buy 2bn...