Call centre bid battle: 3i and Tata sucked into the Vertex

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Private equity firm 3i and Indian giant Tata Group are among a clutch of bidders expected to submit first-round offers for the Vertex call-centre business by tomorrow's bid deadline.

Speculation about the fate of Vertex has been rife since its owner, United Utilities, hired Merrill Lynch to explore options for the unit in June. The company is said to want £400m to £500m, though one source close to the process warned that the range "will be extremely difficult to get to".

The Manchester-based Vertex, which turned a £20.8m profit last year and employs more than 9,000 people across 68 locations, counts Westminster Council, Marks & Spencer and mobile phone group Orange among its clients.

Neither 3i nor Tata would comment. A United Utilities spokeswoman said the review of Vertex - instituted by its chief executive, Philip Green, after the company received several unsolicited approaches for the business - did not necessarily mean that Vertex would be sold. United Utilities' main operations are in electricity and water distribution.

The thinking behind a purchase of Vertex at Tata's outsourcing arm, Tata Consultancy Services, is that it would reduce its reliance on the American market, where it derives more than half of its revenue.

But 3i is thought to be especially keen on the business, which has grown quickly through a series of acquisitions in recent years. The buyout firm hired Akshaya Bhargava, the former head of the outsourcing arm of Infosys, India's second-largest IT services firm, in May to lead the company's charge into the call-centre sector. At the time, 3i said it would focus on buyouts worth up to $1bn (£520m) - criteria that Vertex fits.

Quattro, a company set up by the outsourcing entrepreneur Raman Roy, is also said to have expressed interest and could team up with 3i for a joint offer. Infosys and fellow Indian IT services giant Wipro are also said to be in the hunt.

If an Indian group does end up walking away with Vertex, it will be a rare event. Until now, it has generally been Western buyout firms and companies that have taken over Indian outsourcers. General Atlantic Partners and Oak Hill Partners bought the India-based GE Capital Services in 2004 and in 2002 Warburg Pincus bought WNS Global Services, which is now listed on the New York Stock Exchange.