Alphyra, the electronic transactions group, has confirmed it is the subject of a takeover offer from the US-based First Data Corporation, but cautioned that the two parties were still some distance from reaching agreement.

The Dublin-listed company, formally known as ITG, is already considering a management buy- out bid that values it at €80 million. It was unwilling to say whether First Data, whose subsidiaries include Western Union money transfer, had tendered a sum in excess of this.

Alphyra, which has consistently denied holding takeover talks with First Data, said it decided to confirm the speculation after the The Irish Times reported the US group was poised to make a bid.

The approach was delayed when First Data was forced to change its legal advisers amid fears of a conflict of interest.

Alphyra's management team, backed by Benchmark Capital, has offered €2.45 per share for the company. The team includes chief executive Mr John Nagle, who owns 5 per cent of the company, and finance director Mr John Williamson.

The offer has been recommended by the company's two independent directors, Mr Nick Koumarianos and Mr Grant Wilkinson.

First Data, which is based in Denver, provides electronic commerce and payment services. Aside from the US market, it offers a variety of payment services in Britain, Australia, Canada, Japan, Mexico, Spain, the Netherlands, the Middle East and Germany.

Alphyra went public in 1997 as a telecoms group. The shares traded as high as €22.10 in early 2000 but slumped to a low of €1.40 earlier this year.

The company is well established in Ireland and Britain but is at the developmental stage in Europe. Analysts believe a return to private ownership is a logical move, allowing it to plan a long- term roll-out on the Continent unencumbered by the need to appease the markets.