Capital One in £1.4bn bid for Egg

Capital One in £1.4bn bid for Egg

US credit card company Capital One has offered more than £1.4bn for the Prudential's 79% stake in Internet bank Egg, according to a report by UK newspaper The Sunday Telegraph.

Shares in Egg soared to 197.5 pence in January, valuing the business at £1.6bn, after Prudential announced it was in talks to sell its majority stake in the UK's largest online bank.

At the time, US credit card firm MBNA was identified as the likely bidder, although Royal bank of Scotland, Citibank and HSBC have since also been touted as potential bidders for the online bank.

According to the Sunday Telegraph report, Capital One emerged as favourite to buy Egg after talks between Prudential and MBNA stalled.

Citing un-named bankers in the US, the paper says Capital One took advantage of haggling between MBNA and Prudential to "muscle in" with a rival offer valuing the online bank at more than £1.4bn.

Egg more than doubled its losses to £34.4m last year, up from £16.6 million in 2002, due to its troubled business in France. Egg is still trying to find a partner for the French business and has struggled in the country since launching its La Carte Egg credit card in 2002 after buying French online bank Zebank.

By mid-morning, shares in Egg were up 2.00% to 162 pence.