Argos store card-owner NewDay nears £1.7bn deal with KKR

The owner of Argos's store card division is on the brink of a deal with one of the world's largest private equity investors that will value it at about £1.7bn.

Sky News has learnt that the owners of NewDay Group, which has millions of customers in the UK, were on Tuesday evening close to signing an agreement that will see KKR become a major stakeholder in the company. City sources said KKR was likely to acquire NewDay's existing loan-book as well as buying a stake in its lending platform alongside existing shareholders Cinven and CVC Capital Partners.

An agreement could be announced as early as Wednesday, according to insiders. Money blog: Deodorant brand tells customers to stop using some products NewDay has consumer credit links with some of Britain's leading retailers, including John Lewis Partnership and AO, the online electrical goods site It owns the Aqua, Fluid and Marbles credit brands, as well as Bip - the UK's first digital-only credit "card".

The company's owners have been exploring an outright sale or a more structured transaction for months, drawing interest from parties such as Pimco, the giant bond fund manager. Read more:Bank payday outages 'will absolutely happen again'HSBC 'being attacked all the time' by online criminals NewDay took ownership of Argos's store card business last year in a £720m deal with J Sainsbury, the supermarket giant.

It is one of Britain's biggest privately held providers of consumer credit services, with about four million customers. Last year, it reported £213m of underlying pre-tax profit, with new customer acquisitions up 36%.

It also launched a technology and lending partnership with Lloyds Banking Group, and launched the pilot of a technology partnership with Debenhams Group in the final quarter of last year. The company is chaired by Sir Mike Rake, the former BT Group and Worldpay chairman.

Its chief executive is John Hourican, the former Bank of Cyprus and Royal Bank of Scotland executive. NewDay, KKR and CVC declined to comment..