Wheeler to net up to £35m as IG Group sale nears

The management team at IG Group, the pioneering spread betting company, have emerged as frontrunners to win control of the business effectively put up for sale last month by its founder, Stuart Wheeler.

Nat le Roux, who replaced the flamboyant Mr Wheeler as chief executive last summer, has told the board that he is working on a buyout.

A number of potential venture capital backers have already approached the company. These are believed to include Duke Street Capital, owner of IG's smaller rival Sporting Index.

Mr Wheeler sparked a takeover race for IG by putting his 23 per cent stake on the market. He could net up to £35m to help pay the spiralling repair bills at his Kent mansion, Chilham Castle.

The 68-year-old, who made Britain's single biggest political donation by giving £5m to William Hague's Conservative Party in 2001, has decided to cut his ties with the business, which he still chairs.

Mr Wheeler's original backers, who put in £30,000 to set up IG Index in 1974, are also planning to sell out, so with 45 per cent of the group now up for grabs, any buyer would be forced to table a full takeover bid.

IG said yesterday that it had received a number of expressions of interest, but these were still very early stage and none had included a likely take-out price. Analysts believe Mr Wheeler will struggle to make the 300p per share he has privately indicated would be his minimum price. The share price has stayed well below that level and stood at 235.5p last night, up 15.5p on confirmation of the management buyout interest.

IG said yesterday that Investec – which had previously been advising Mr Wheeler on his stake – will now advise the company and attempt to begin an auction. As well as venture capital interest, the company has attracted enquiries from a number of trade bidders. City Index, the private betting group run by the Icap chairman Michael Spencer, is said to be among the interested parties, along with E*trade and Financial Spreads.