Barclaycard mall to buy ShopSmart portal

Barclaycard mall to buy ShopSmart portal

IndigoSquare, the online mall from Barclaycard, has made an offer to acquire UK Internet shopping portal ShopSmart for £1 million in cash, plus a ten per cent stake in the combined company.

IndigoSquare has already received agreement to accept the offer from the ShopSmart board and key shareholders, which together own approximately 72.5 per cent of the company's share capital. ShopSmart's remaining shareholders now have 28 days to vote on the transaction.

The deal will create the largest online shopping centre in the UK, says Barclaycard. The combined venture will carry Barclaycard's branding in a bid to build consumer trust in online purchasing. The bank points to analysis by NOP which indicates that more than 70 per cent of Internet purchases are made using a credit card.

IndigoSquare's chief executive, Mark Shea says: "This deal will significantly accelerate our growth. It opens up huge opportunities for us in online shopping, which is expected to be worth £12.5 billion in the UK by 2005."

IndigoSquare was launched in November 2000 in a £30 million joint venture between Barclays Bank and Nomura International and offers a range of products, from gifts, computers and travel to health and beauty, music and clothing. It is not expected to be profitable until 2003. ShopSmart opened for business in 1998 and lays claim to being the UK's largest internet retail intermediary, offering products from 1000 retailers. It has 500,000 visitors every month.

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