USwitch Plots Deal With Taxpayer-Backed LDC

By Mark Kleinman, City Editor

A private equity group backed by UK taxpayers is in talks to acquire a stake in the price comparison website USwitch.com.

I understand that LDC, which is owned by Lloyds Banking Group, is in advanced negotiations about buying a sizeable shareholding in USwitch.

The deal is expected to value the online operation at a fraction of the £210m for which it was sold by its founder, Lord Milford Haven, in 2006.

The talks between LDC and USwitch's current owner, Forward Internet Group, are at an advanced stage and a deal is expected to be announced shortly, insiders said.

The precise valuation and size of the stake being bought by LDC were unclear this weekend.

USwitch operates in a fiercely competitive market, and in recent years has seen itself outmuscled in terms of the prominence of its advertising by larger rivals such as Comparethemarket, Go Compare and Moneysupermarket.com.

Lord Milford Haven's windfall from the sale of the site in 2006 resulted in a substantial loss for the buyer, the US media group EW Scripps.

It sold the business to Forward for less than £10m and took a big writedown on the value of Uswitch because of slower-than-expected consumer switching trends.

USwitch works with thousands of direct and affiliate partners, providing their websites with branded comparison tools for a range of home services. Its calculators also appear on many other websites.

LDC provides equity to UK-based companies with profits of more than £1m, and owns stakes in businesses such as Mama, the live music venue operator, and Blue Rubicon, a public relations consultancy.

LDC and Forward declined to comment.

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