Blackstone and TPG line up to bid for troubled Egg bank

BLACKSTONE and TPG are believed to be preparing a bid for US lender Citigroup’s online bank Egg.

Citigroup bought the unit in May 2007 for £546m from British insurer Prudential. However binding offers are expected to fall well short of that level, at around £300m.

Barclays bank is also believed to have an interest in Egg and could merge it with its Barclaycard and mortgage operations. But it remains unclear if it will lodge a binding bid.
Blackstone has teamed up with specialist credit card provider SAV Credit, which is backed by private equity investors Palamon Capital, Morgan Stanley Alternative Investments and Electra Private Equity.

If successful, Blackstone would merge Egg with SAV Credit, which owns the Marbles credit card brand, taking control of the enlarged group, one source said.

Citigroup has already said that Egg is part of its portfolio of non-core assets that it is looking to reduce.

The bank has never disclosed financial figures for Egg, although it was a troublesome asset for Prudential, which set it up in 1998 as one of Britain’s first internet banks.