MUMBAI: Japanese financial services firm Credit Saison and a consortium of PE fund Carlyle Group and Cognizant Technology are among the final contenders for GE’s stakes in SBI Card in a deal that values India’s third-largest credit card player at $750 million-1 billion, several people aware of the development said.
Bulge-bracket private equity player Warburg Pincus and a combine of General Atlantic and NYSE-listed payments giant Tsys are the other two shortlisted from among diverse strategic and financial suitors. The final four contenders are due to submit binding offers next week, though the deadline may be postponed by a few days.
Sources said the minimum valuation expected for the two joint ventures of SBI Card is around $750 million. But some feel heightened competition may see valuations touch the billion-dollar mark. GE’s stake alone could fetch $350-400 million (Rs 2,345-2,680 crore) at the least.
Last April, GE had taken a call to sell a majority of worldwide assets under GE Capital as part of a decision to exit financial services and concentrate on the traditional industrial businesses. It had mandated investment bank Morgan Stanley to help find a buyer. State Bank of India had roped in Barclays as an adviser.
SBI, the nation’s largest lender, entered the credit cards business in 1998 by partnering with GE Capital India, the consumer finance arm of GE Capital.
The JV operates through two companies — SBI Cards & Payment Services, which focusses on marketing and distribution of SBI credit cards; and GE Capital Business Processes Management Services, which handles the tech and processing needs of the business as its captive BPO (business process outsourcing) unit.
