Barclays exploring acquisition of Tesco Bank - report

(Sharecast News) - Barclays has reportedly been exploring a potential acquisition of Tesco's banking operations. Reuters cited two people familiar with the matter as saying that the UK supermarket chain has asked prospective buyers to submit non-binding offers for Tesco Bank by the end of the week, as part of efforts to shrink its financial services footprint.

It was understood that Barclays has already made an indicative bid and is particularly interested in Tesco Bank's credit card and saving account products.

Other bidders are expected and there is no certainty that a transaction will materialise, sources told Reuters.

They said Tesco's banking operations could be attractive to other lenders because of the opportunity to cross-sell banking products to the grocer's customer base. However, one source added that tough market conditions risk denting the appetite of potential buyers.

Sky said it could not be established how much the proposed deal would value the Tesco Bank assets.

Tesco Bank was launched in 1997 as a joint venture between the supermarket chain and Royal Bank of Scotland, with Tesco later taking full control of the company.