LONDON, Nov 20: US private equity group JC Flowers has submitted a takeover bid for stricken British home loan provider Northern Rock, a source close to the matter said.

Since the bank was hit by a funding crisis, Northern Rock has borrowed about 25.3 billion pounds in emergency funds from the Bank of England (BoE).

According to the news agency Thomson Financial News, which cited a source familiar with the situation, JC Flowers has offered to repay 15bn pounds to the BoE, should its bid prove successful.

The rest of the central bank loan would be repaid over the next three years, the source added.

Under terms of the offer, JC Flowers would buy Northern Rock and take it private, investing 1.0 billion pounds into the business.

The bank would continue to operate as a British mortgage lender under the Northern Rock brand.

However, existing Northern Rock shareholders would be offered only a “nominal” sum, the source said, adding that the precise figure has not yet been determined.

Northern Rock, which is exploring takeover proposals and rescue packages, stated on Monday that bids received thus far had materially undervalued the company.—AFP