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Bradford & Bingley Not Pursuing N. Rock Bid

Britain's biggest buy-to-let lender, Bradford & Bingley, said on Wednesday it was not pursuing a bid for Northern Rock, but declined to comment on a report that it could be interested in parts of the lender.

The BBC reported that Bradford & Bingley had approached Northern Rock about certain assets, sending shares in the beleaguered bank up over 5 percent in early trade.

"We were one of several parties that received a copy of the Northern Rock briefing memorandum," a B&B spokeswoman said.

"Contrary to reports, Bradford & Bingley is not currently pursuing a bid for Northern Rock," she added.

The spokeswoman had no comment on whether it could bid for parts of Northern Rock.

Northern Rock was not available for comment.

Britain's fifth-largest mortgage lender and now the country's biggest casualty from the global credit crunch, Northern Rock is being auctioned off, but the process has been thrown into doubt in recent weeks with suitors hitting funding troubles.

The two remaining suitors are investment group Olivant, led by former Abbey boss Luqman Arnold, and Northern Rock's preferred bidder, Virgin.

Should a deal with either of those two fail, the bank could face nationalization or a wind-down and a breakup, trying to sell assets and its mortgage book to rivals like B&B.

Britain's financial regulator has warned banks interested in buying mortgage books to reconsider whether they should be exchanging cash for illiquid assets in times of turmoil. B&B, however, said last month it had funding through to the end of next year and was "padded up for a long haul."

Northern Rock shares were up 5.8 percent at just over 90p, while Bradford & Bingley shares were down 0.9 percent.