Sky News has learnt that Railsr, which Lord Hammond joined only last month, has written to Equals Group to propose a combination of the two companies.

It was unclear on Wednesday when the approach was made and whether there were active discussions taking place between Railsr and Equals Group.

In a stock exchange announcement on Wednesday morning, Equals Group said it remained in an offer period and extended a deadline for formal offers until mid-April.

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Madison Dearborn Partners, a US-based private equity firm, and other suitors are also examining offers for the company.

Equals Group, which has a market capitalisation of just over £200m, offers business-to-business payment solutions to corporate clients.

Railsr, whose parent company is called Embedded Finance, provides banking-as-a-service and cards-as-a-service with offerings such as card issuing and virtual wallets, both of which have seen burgeoning demand amid the explosion in digital finance.

Last autumn, it raised about £20m from investors including D Squared Capital and Moneta Venture Capital as it set its sights on expanding again.

Best-known for acquiring assets which were once part of Wirecard, the defunct German technology company, Railsr became a victim of aggressive over-expansion, running into serious regulatory issues just as funding markets for technology companies had dried up.

It has since appointed Philippe Morel, an experienced fintech executive, as its CEO.

Railsr and Equals Group declined to comment.