USwitch, the price comparison website, is close to a sale, but the price tag is thought to be less than half the £210 million that its owner paid for it three years ago.

Scripps Networks Interactive, the American group that owns uSwitch, is understood to have entered exclusive talks with a buyer. An announcement is expected before Christmas.

The talks come as new accounts for the site, filed in September, reveal that its loss for the year that ended on December 31, 2008, widened to £3.6 million, from £3 million a year earlier.

Scripps, which is being advised by Allen & Co, the American investment bank, said that the sale had received “interest from a number of qualified potential buyers”.

However, bankers say that thin margins and a glut of such sites on the market mean that Scripps is likely to shoulder a heavy loss on its acquisition.

Moneysupermarket.com, a rival site, and Jamplant, the investment vehicle owned by people including Lord Milford Haven, a founder of uSwitch, are among those believed to have looked at the company. Private equity buyers have also run the rule over it.

The site was launched in 2000, offering a comparison of gas and electricity tariffs. It has expanded to include telephone, broadband and financial products.

There are now 40 similar sites. Rival businesses said that any buyer of uSwitch would have to spend large sums on advertising to keep abreast of the competition. An expensive campaign by Comparethemarket.com, one of uSwitch’s rivals, has had huge success, increasing the website’s traffic by 83 per cent since January and forcing its peers to reconsider their own advertising.

Moreover, consolidation is under way in the market. Moneyexpert acquired the remnants of SimplySwitch last year after Daily Mail & General Trust had shut it down because it had failed to attract enough users. Moneyexpert received £25 million of funding for the deal from TCV, a California-based private equity group.

Fierce competition between the sites and their growth in popularity has prompted interest from the Office of Fair Trading. The competition watchdog said last month that it would start a market study into such sites. The review could result in a referral to the Competition Commission or the creation of an industry code of practice.

Uswitch would say only that the sale was being handled in the United States.

Wealth of choice

• The first comparison site in Britain was Moneysupermarket.com, in 1999 USwitch.com was the second site to launch and focused on utilities

• The number of sites has reached about 40 Moneysupermarket.com is the market leader, with 40 per cent, followed by: GoCompare.com, on 18 per cent; Confused.com, with 16 per cent; ComparetheMarket.com, on 12 per cent; and uSwitch.com, with 5 per cent

Source: Hitwise, July 2009

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