KKR has emerged as the frontrunner in a potential £1.7bn acquisition of NewDay, the British consumer finance group best known for managing the Argos store card, according to a Sky News report.

NewDay is currently owned by Cinven and CVC Capital Partners. Sources indicate that while KKR is leading the bidding process, it has yet to enter exclusive negotiations. Other suitors, including Pimco and a Bain Capital-led consortium, remain in contention.

Some bidders, such as Pimco, are focused on acquiring NewDay’s consumer loan book rather than the entire company. However, KKR is reportedly interested in a full buyout, potentially allowing current shareholders to retain a stake during the transition.

NewDay has been exploring strategic options since late 2023, including a sale or a possible IPO. Last year, it acquired Argos’s store card business from J Sainsbury for £720m, significantly expanding its customer base. The company now serves around 4 million UK customers and is one of the country’s largest privately held providers of consumer credit.

Financial results underline strong growth momentum, with underlying pre-tax profit of £213m and a 36% year-on-year increase in new customer acquisitions. NewDay also launched technology and lending partnerships with Lloyds Banking Group and Debenhams.

A successful deal would add to KKR’s recent flurry of UK activity, including its interest in listed firms like Assura and Spectris. For Cinven and CVC, the NewDay exit would mark another major realisation in a climate where fundraising conditions remain challenging.

KKR, CVC, and NewDay declined to comment on the ongoing process.

Source: Sky News

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