Internet bank Egg was looking to fulfil its promise of European expansion today by pursuing a deal with French businessman Bernard Arnault.
Egg, which is 80 per cent owned by the Prudential, is involved in exclusive talks about acquiring Zebank, Groupe Arnault's online financial business.
The UK company confirmed media speculation about the talks today but stressed there was no certainty a deal would be struck.
Reports said Mr Bernard Arnault - one of France's richest men and chairman of the LVMH luxury goods group - had been looking to off-load the operation since the bursting of the dotcom bubble last year.
Zebank has an estimated 100,000 accounts, although this pales in comparison with the two million customers attracted by its UK counterpart.
Egg said last month it had recorded its first profit during November but chief executive Mr Paul Gratton also reiterated the company's desire to expand onto the continent.
The first steps across the Channel will be taken this summer when Egg begins an alliance in Germany and France with Microsoft's MSN website.
Egg's discussions about acquiring a majority holding in Zebank involve Groupe Arnault, which owns an 80 per cent stake, and the remaining stakeholder Franco-Belgian bank Dexia.
It is thought Groupe Arnault will look to retain a stake in the new company.
In the meantime, Egg said Zebank was seeking to secure distribution arrangements with certain French retailers - similar to Egg's credit card distribution arrangement with high street giant Boots.
Egg added in a brief statement today: "Shareholders should note that the discussions have yet to be completed so there can be no certainty as to their outcome."
Shares in Egg were down nearly 5 per cent - off 7p at 141p - following the lunchtime announcement.
PA