Paragon looks for buyer

Paragon Mortgages confirmed today it has received evaluating offers from a number of prospective buyers and is now assessing their viability.

The buy-to-let specialist has seen business slump dramatically in the wake of the subprime crisis, weakening its position and exposing it to the threat of takeover.

"In order to determine whether any of these approaches may form the basis for an acceptable offer or offers, the Board has entered exploratory discussions with, and is providing certain due diligence access to, the parties concerned," Paragon confirmed in a statement to markets this morning.

However, there is "no certainty" that these discussions will lead to any offer being forthcoming.

Paragon went on to confirm further announcements will be made in due course as appropriate.

While it has not been acknowledged by the firm, American investment group Blackstone has been reported as the most likely bidder.

Investors appear keen in the company despite its present turmoil. Paragon stopped issuing new loans earlier this year, and was among the first company's to call for a rights issue in response to the housing market slowdown.

Shares in the company have fallen from 470 pence each a year ago to as low as 49 pence earlier this month – however, speculation of a takeover has driven the price up 18.15 per cent his morning, to 99.25 pence.

This values the company at around £246 million.

Chris O'Toole