Egg 'just days from being eaten'

Internet bank Egg is just days from being taken over by American credit card company Capital One, it was reported today.

It is understood that Prudential, which has a 79% stake in Egg, has set a deadline of two weeks for the £1.4bn (€2.1bn) deal to take place.

According to The Sunday Times, Capital One emerged the frontrunner in the battle for the online bank after outmanoeuvring rival MBNA.

A deal could be agreed to coincide with Egg’s half-year results on Thursday, but it is thought that MBNA may still raise its offer at the last minute.

Virginia-based Capital One, which was set up in 1995, has 46.7 million customers worldwide and has its UK operations centre in Nottingham.

The auction was launched in January this year after Prudential announced it was in talks to sell its stake in the business and had received a number of approaches.

It was reported today that Prudential’s chief executive Jonathan Bloomer told advisers that if a deal is not sealed soon he will abandon it and keep the group independent.

Earlier this month Egg called time on its loss-making venture in France - making the firm more attractive to potential buyers.

In the three months to March 31, the operation reported losses of £15.8m (€23.8m), virtually wiping out profits in the UK division.

Egg, which employs about 2,000 people in Derby, Dudley and London, reported a fall in first quarter pre-tax losses to £4.9m (€7.4m) in April from £15.7m (€23.6m) during the same period of 2003.

The group said operating income rose by 26% to £120.3m (€181m) in the three months to March 31, boosted by an additional 148,000 customers using its services.

Nobody from Capital One was available to comment and Prudential declined to comment on the speculation.