TWO US companies have joined forces to bid for the MBNA credit card operations in Ireland and Britain which Bank of America put up for sale three months ago.
MBNA employs 750 people in Carrick-on-Shannon, Co Leitrim, making it one of the biggest employers in the northwest. It emerged yesterday that private equity fund, Apollo Global Management, and US merchant bank Goldman Sachs have entered the auction for the business.
Reports yesterday said that the two groups, both based in the US, have joined forces to bid for the MBNA Europe Bank operations. The move pits the pair against both Virgin Money and Barclays.
Bank of America announced in August it was selling the MBNA Europe operation, as it no longer considers it central to its business.
The announcement threw a question mark over the 750 jobs the company supports in Leitrim.
Earlier this month, the US bank said that it would be seeking 100 voluntary redundancies there. The jobs are part of its collection division, which it is aiming to slim down ahead of any sale. The operation involves staff working in both Leitrim and Britain, where it is seeking to axe 150 jobs. Concerns about the future of the Carrick-on-Shannon operation prompted Minister for Jobs and Enterprise Richard Bruton to meet Bank of America executives during a trade mission to the US in September.
At that point, a number of potential suitors had expressed interest in the European credit card operation. The business has more than €11 billion in assets and employs 3,000 people, three-quarters nof them in Britain. The Irish operation recently filed accounts showing that it made profits of €2.9 million last year, down 17 per cent on 2009, when it made €3.4 million.
It was not clear yesterday if Goldman intends to contribute equity to the bid or just to loan money from its debt funds to Apollo.
The interest of the US investors underlines how private equity groups are gearing up to buy the numerous assets that banks are selling to shore up their ailing balance sheets. Virgin Money does not intend bidding for all of the portfolio. Instead it hopes to acquire the part of MBNA's Irish and British credit card book that is made up of its own customers. – (Additional reporting: the Financial Times)
