IG Group heads for the market

SPREAD-betting firm IG Group has proved a successful gamble for private equity firm CVC Capital Partners, which is considering a £250m flotation of the business less than two years after buying it for £143m.

It would be the second flotation in five years for the company founded by Conservative Party financial backer Stuart Wheeler in 1974. IG Group joined the stock market in 2000, but was bought out by its management, headed by chief executive Nat Le Roux, who were funded by CVC. The sale netted Wheeler a £34m windfall.

Subsidiary company IG Index allows customers to bet on share price movements, currencies and commodities, as well as sporting events.

A CVC spokesman said: 'We are appointing financial advisers to evaluate IG Group's options, including a flotation. When any of the options has been agreed, an announcement will be made.'

Observers believe strong growth in spread betting, particularly in financial markets where customers are attracted by tax-free profits, has benefited market leader IG.

After paying off debt, a £250m-flotation would produce a big profit for IG's management and CVC, whose other recent investments include the AA. It floated motoring accessories retailer Halfords last year.

IG's last accounts - for the year to May 31, 2004 - showed record results with earnings before interest, tax and other charges of £22.9m, up from £15.6m the year before, on turnover up £9m at £48m.

The company said its fastest growth was in binary betting, a type of fixed-odds gamble on both financial and sports markets.

As well as being Britain's biggest spread betting firm, IG has an office in Australia.