Credit giant Barclaycard plans to purchase Egg’s customer portfolio, which includes more than one million accounts with a credit value of £2.3bn. The completion of the deal is expected by the end of June after it meets regulatory approval.
Details of the intended takeover are yet to be been fully disclosed. Egg customers who carry the green Egg card, qualified for special rewards and interest rates prior to the buyout. Rewards such as 4 percent cash back on Apple products like the iPod and the iPad, free shipping and free engraving from Apple. Other rewards include cash back rewards on services like home insurance and retail purchases at Debenhams.
Barclaycard has given no indications to Egg’s current customers regarding their card rewards. However, a spokesperson for Citi released a statement saying, the company “committed to working with Barclays on a seamless transfer of the customer accounts, ensuring continuation of the high level of service to which customers are accustomed”. Initially in the 2008 buyout of Discover, Barclaycard made every effort to ensure that customers transferred in retained their rewards. Barclaycard created four new cards to accommodate the rewards of the transferees. However, after several months, Barclaycard reduced the rewards significantly by more than 50 percent.
Egg was the first internet-only bank to open in the UK back in 1998. In 2005, the bank was acquired by Prudential after purchasing all of the minority shares, which leveled Egg’s value at £900 million. Since 2007, Egg has remained under US based Citigroup’s control following a purchase from Prudential because of mediocre performance.