UK-based online shopping comparison service is said to be on the verge of a major deal with US retail giant Wal-Mart and the world’s largest ISP, America Online.

The two US companies are together expected to acquire around 20% of ShopSmart, with Wal-Mart’s holding approximately twice that of AOL. It is thought unlikely that any cash is on the table, payment being made in kind via on- and off-line promotional support.

In addition, Wal-Mart will merge its rival price comparison service, Valuemad, into ShopSmart, which earlier this year expanded into Sweden and Germany. The association with ShopSmart is likely to enhance Wal-Mart’s reputation in the UK [and indirectly that of its subsidiary, Asda] for offering lower prices than other major supermarkets.

ShopSmart, which plans an IPO on a date yet to be announced, derives the bulk of its income from advertising and fees received every time someone clicks on one of its links to an online shopping site. No ‘rent’ is charged to stores appearing on its site.

Analysts believe a flotation would value ShopSmart between £200m-£300m ($300m-$450m), although a done deal with Wal-Mart and AOL would further enhance the valuation.

News source: Financial Times