In response to yesterday’s column, which argued that SRM and RAB Capital were putting a private sector solution for Northern Rock at risk by pushing the Government and potential bidders for a better offer, one investor argued that these funds are not taking a strategic gamble but making a mathematical calculation.

Extrapolating from the Virgin consortium’s offer, the net asset value of the reconstituted Rock will be £3.1 billion. After the rights issue, there will be 6.62 billion shares. Each, on one times book value, would be worth 47p. Shareholders who pay about 120p for a Rock share are getting the right to buy a further six shares at 25p. In essence, they are paying 270p for seven shares – or 38p a share. That, they say, is the real sting in the scorpion’s tail.

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