Shares in Capita jumped in early trading this morning following reports the TV licence collector is being circled by private equity giant CVC Partners.
The troubled FTSE 250 outsourcer has suffered a slide in profits and seen its share price fall 80 per cent this year.
But European private equity stalwart CVC, which has previously owned Formula One and Legoland operator Merlin Entertainments, is now weighing up a bid, the Daily Mail reported.
A second private equity suitor is also targeting Capita’s education software decision, according to the report, paving the way for a major bidding war.
Shares in Capita were up nearly 13 per cent on the report.
However, a source told Reuters that CVC had no plans to launch a takeover bid and was only looking at specific units that the outsourcer is hiving off.
In a brief statement Capita said it had not received a takeover offer from CVC.
Capita, which is one of the government’s largest outsourcers, collects TV licence fee payments for the BBC and operates the charging system for London’s congestion zone.
The group employs 45,000 staff in the UK alone but has been hit by a decline in work from local authorities and a string of botched contracts that have cost it millions of pounds.
Turnaround expert Jon Lewis was brought in as chief executive at the end of 2017 to help reverse the company’s fortunes.
But Capita has warned its turnaround plan has been torpedoed by the coronavirus outbreak.
The outsourcer swung to a loss in the first half of the year and warned it would not generate sustainable cashflow for one to two years.