Saga Group is heading for either a flotation or a sale in a deal that could be worth as much as £3bn.

The travel and financial services company, which caters for the over-50s market, has appointed investment bank Close Brothers to look into future ownership options.

A stock market float is one of the most likely choices, according to Saga chief executive Andrew Goodsell.

Goodsell said that a public listing was not a foregone conclusion. He added that the company is "very IPO-able".

The sale could generate a total pay-out of about £600m for Saga employees, with Goodsell's 8% share estimated at around £240m.

Charterhouse, the UK private equity group, bought Saga in October 2004 in a £1.35bn management buy-out deal from Roger de Haan, whose father founded the company 50 years ago.

Private equity groups, including Kohlberg Kravis Roberts, BC Partners, HG Capital, Apax Partners and Candover, tabled bids for the company three years ago.

They are now expected to make new offers for the group over the next two weeks.

Only then will the group decide on a float or a sale.

Last year the Saga Group, which is understood to be growing at a rate of 20% a year, reported an operating profit of £134m.