Bidders poised to swoop for MBNA

POTENTIAL buyers are reported to be lining up bids for MBNA, one of Britain’s largest credit card issuers.

According to Sky News, owners the Bank of America has activated plans for an auction of MBNA, which has a loan book of about £7bn – is equivalent to about 11% of the UK credit card market.

The potential sale follows a previous attempted sale by BoA which attracted an unsuccessful offer from private equity firm Apollo Management, part of Wall Street bank Goldman Sachs.

BoA has decided to try again to offload MBNA, which employs more than 1,500 people at its base in Chester and has more than five million UK customers, said Sky.

A deal to buy the business, which issues cards under the brands of dozens of partners such as Premier League football clubs Arsenal and Manchester United, would be likely to value it at hundreds of millions of pounds and possibly more, insiders have suggested.

When contacted by TheBusinessDesk, MBNA refused to comment.

MBNA, which also issues cards branded with charities such as the British Heart Foundation, made a profit of £166m in 2015.

Its parent’s plan to sell the business comes as demand for contactless payment products soars, with card-issuers scrambling to develop sophisticated mobile wallet services.

MBNA, which sponsors the rugby union team Sale Sharks, said March that it would begin offering Google’s Android Pay service to consumers when it launches later this year.

MBNA’s attempted sale in 2012 also attracted interest from Barclays, which owns Barclaycard, the UK’s biggest credit card provider, and Virgin Money.

Lloyds Banking Group and Virgin Money are expected to be interested in exploring bids for the credit card group this time around.

In 2013, Virgin Money acquired a £1bn portfolio of credit card assets operated under its own brand from MBNA, two years after it also bought Northern Rock’s “good bank” from the Government.

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