Jon Wood, the celebrated former UBS trader and rebel shareholder in Northern Rock, has turned his sights on Countrywide, America’s biggest mortgage lender.

Mr Wood, who trades from Monaco through his SRM Global hedge fund, which is Northern Rock’s biggest shareholder, revealed yesterday that he had amassed a 5.19 per cent stake in Countrywide.

Through a regulatory filing in the US, Mr Wood said that he would use his stake to try to block the agreed $4 billion (£2 billion) takeover of Countrywide by Bank of America.

Mr Wood, who failed this month to win the backing of fellow investors to limit the powers of Northern Rock’s board, described the deal as contrary to the interests of its shareholders, saying it “considerably undervalues the company”. SRM said that the all-stock deal values Countrywide at $8 a share, while the lender’s book value is more than $20 a share. Countrywide shares rose 48 cents at $6.95 yesterday.

Bank of America agreed on January 11 to buy Countrywide after the shares lost 85 per cent of their value in a year, as the mortgage lender reeled from America’s housing crisis.

The deal came only five months after Bank of America paid $2 billion for a 16 per cent stake in Countrywide, which had left it with a paper loss of about $1.3 billion.

Countrywide’s shares have been rocked by a series of mishaps, including its first reported loss in 25 years in the third quarter and record foreclosures and late payments on its mortgages in December.

A Bank of America spokesman said yesterday that the agreed takeover of Countrywide was “fair for both companies”.

SRM, which reported buying 30 million Countrywide shares in the filing, said that it “intends to take all steps to preserve the value of its investment and protect its rights”.

It added: “We think that the board and its advisers should fully explain to shareholders the reasons why they have agreed to recommend the transaction to shareholders at less than half the company’s book value.

“We believe that the company is strong and will rapidly return to profit on a standalone basis. If that is not the case, we would ask management to explain why, and what efforts they made to secure the company’s independentfuture, or, failing that, to auction the company and induce alternate bids to maximise value for all shareholders.”

Alongside Philip Richards, the chief executive of RAB Capital, Northern Rock’s second-largest shareholder, Mr Wood has promised to back privatesector bidders by subscribing to a rights issue that would provide the troubled bank with additional funding.

The hedge fund managers have promised to put up hundreds of million of pounds, if necessary, to underwrite the capital raising. The pair have favoured an offer for Northern Rock from Olivant, a consortium led by Luqman Arnold, the former Abbey chief executive, saying it would be less dilutive to shareholders than a proposal from Virgin Group. Mr Richards and Mr Wood have also said that they would support a standalone proposal from Northern Rock’s management.

Bidders for the bank must submit offers by February 4.

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