Electra Partners Europe has put Premium Credit, a former specialist finance unit of HSBC, up for sale according to a new report. The move could fetch up to £250 million.
The investment bank managing the sale, Lexicon Partners, is said to be in talks with several parties, including private equity firms Duke Street Capital and Bridgepoint Capital, who are both named in the report, as well as overseas finance houses.
According to a report, Lexicon is hoping to receive indicative bids for Premium Credit by the end of the month and is said to be looking for £150 to £250 million for the company.
The report continued that a source close to the sale said: "Premium Credit is more likely to be sold to a trade buyer, which can pay more to take advantage of the synergies the deal would offer, than a financial buyer."
Bridgepoint Credit, one of the private equity contenders, is already involved in the market through Opus, the UK commercial insurance broker it purchased in 1998.
Electra is also said to be considering floating Premium Credit, the report continued, although a sale is said to be the more likely option.
Premium Credit made a profit of £15m in 2002, said the report. Chairman Graham Puttergill and chief operating officer Ken Garrod run the company, which is said to employ around 300 staff.
The report added that Premium Credit is expanding into areas such as school fees and sports club membership.
