General Atlantic, the US private equity firm, is considering an initial public offering of Xchanging, the UK-based outsourcing and processing business that ranks as one of its largest European investments.

People familiar with the matter said Xchanging, which General Atlantic formed in 1998, had been in discussions with a number of investment banks about a flotation on the London Stock Exchange that could value the group at about £500m. However, they cautioned that those plans could still unravel.