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Capita share price falls as Montagu could offer £150m less than expected for ESS

The Capita (LON: CPI) share price fell by over 6 percent in early trading on Monday after reports circulated that Montagu could offer £150m less than expected for ESS.

Capita had originally had hoped to fetch £500m from the sale of its Education Software Solutions business.

However, The Times via Mergermarket notes that the only remaining bidder (Montagu) is potentially looking at offering between £350m to £400m for the business.

The outsourcer recently revealed a statement that indicated that is in exclusive talks with Montagu but added there was no certainty a deal will be done nor the terms for the sale.

The sale of ESS for Capita is seen as a pivotal milestone as it looks to pay down its continued spiraling debt and get its promised turnaround back on track.

Once a darling of the FTSE 100, CPI is now worth just £700m with rivals such as G4S enjoying a resurgent market capitalisation at a valuation of over £3.5bn.

Shares in CPI are currently trading at 42p – having enjoyed a strong rally from 24p at the start of the month.

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