Buyout Firms Vie For £360m VAT Refund Giant

A bitter public row about the charges imposed on airport travellers by leading retailers has not diminished enthusiasm for a potential €500m-plus (£360m) takeover of one of the world's leading VAT refund providers.

Sky News has learnt that major private equity groups including Bridgepoint, Eurazeo (Other OTC: EUZOF - news) and Hellman & Friedman have tabled bids to buy Fintrax Group, which is based in Galway, Ireland (Other OTC: IRLD - news) .

The offers were among a number submitted last week amid intense interest in a takeover of Fintrax.

Owned by Exponent Private Equity, another buyout firm, Fintrax owns‎ subsidiaries including Premier Tax Free, which operates across nearly 30 countries and provides retailers with "an innovative and easy-to-use tax-free shopping solution, and shoppers with a quick and comprehensive refund network".

The auction comes just months after major retailers including WH Smith (LSE: SMWH.L - news) were submitted to a furious attack by Government ministers over their failure to pass on refunds in order to bolster their profits.

Established in ‎1985, Fintrax also owns a payments systems business which offers "dynamic currency conversion", which enables consumers to pay for goods in their domestic currency while travelling abroad.

The interest in Fintrax comes amid a burgeoning appetite from private equity investors to tap into more of the 'plumbing' associated with the financial services sector.

Bridgepoint, for example, owns Moneycorp, the foreign exchange provider.

Exponent (NasdaqGS: EXPO - news) does not provide detailed sales and profit figures for Fintrax but insiders have told Sky News that it would expect to sell the company for much more than the €160m it paid to acquire it in 2012.

One of the bidders suggested that €500m would be a more reasonable valuation today given its rapid growth.

It (Other OTC: ITGL - news) emerged during the summer that retailers including Boots, Dixons and WH Smith were asking airport passengers to show their boarding passes at airside outlets, implying that they would benefit from the VAT savings, but without passing them on.

David Gauke, the Treasury minister, criticised retailers for the practice, some of which said they were unable to adopt a dual-pricing structure.

Mr Gauke's Labour shadow, Gordon Marsden, called on the Government "to ensure that customers are being treated fairly so that it is not just retailers who can benefit from the relief".

The criticism of retailers intensified when it emerged that some, including Marks & Spencer (Other OTC: MAKSF - news) , were also charging more for items at their shops within hospitals than on the high street.

Exponent declined to comment on its plan to sell Fintrax, while none of the bidders could be reached for comment.