The share price of Capita (LON: CPI) tumbled as lower than expected offers were received from the potential sale of its ESS unit.
According to Bloomberg, inside sources have revealed that the company has received lower than expected bids for the Education Software Solutions division.
It was hoping to raise between £500m-£700m from the sale in a bit to pay down its spiraling debt.
A number of firms including Bain Capital and TPG did not submit binding bids and dropped out of the process.
If it was successful in raising £500m from the sale, it would have raised more than its current market value of £430m.
With many investors pointing to the value of Capita’s assets being potentially more than its market value, news that ESS is not valued as highly as touted will be a bitter blow.
Capita’s share price is currently trading at below 26p following a near 8% drop today.
The struggling outsourcer is now considering whether to push on with the sale or retain the business and try to sell off other assets.