UK's De La Rue explores options as it draws proposals for its businesses

(Reuters) -British banknote maker De La Rue is looking at strategic options and has been in talks with several parties that have made proposals or expressed interest in either its authentication or currency businesses, it said on Thursday.

This follows a strategic review that it undertook after a tough 2023 in which its profit slumped. Demand for banknotes dwindled after central banks stockpiled cash during the pandemic and digital banking and contactless payment became more popular.

Shares in the London-listed firm rose 8% to 106 pence in early trade.

The company, based in Basingstoke, west of London, designs around a third of the world's banknotes and its headquarters houses what it calls the largest currency design studio, offering governments and central banks varied levels of security features to prevent counterfeiting.

"The Board confirms that the discussions with the relevant parties are advancing, and we expect to update further at the time of the full-year results in July," Chairman Clive Whiley said in a statement.

Under CEO Clive Vacher, De La Rue has tried to turn around its fortunes and consolidated into two divisions, focusing on growing demand for polymer notes and its authentication business.

The authentication unit designs and makes secure documents and security features such as holograms to authenticate goods, and has sought to capitalise on more countries adopting tobacco tax stamps to comply with World Health Organisation rules.

De La Rue, which also designed the new King Charles III polymer banknotes in collaboration with the Bank of England, said there could be no certainty of a deal at this stage.

The 200-year-old company said it also signed contract extensions with two existing government customers, taking future revenue at its authentication business to more than 350 million pounds ($444 million) from multi-year contracts.

($1 = 0.7881 pounds)

(Reporting by Yadarisa Shabong in Bengaluru; Editing by Janane Venkatraman and David Holmes)