By Mike Spector, Christina Rexrode and Gillian Tan
Subprime lender Springleaf Holdings Inc. and private-equity firm
Centerbridge Partners LP are among those separately weighing
initial bids for Citigroup Inc.'s U.S. subprime lending business
ahead of a Thursday deadline, said people familiar with the
matter.
The sale process for the business, OneMain Financial, is in
early stages and other bidders could emerge, the people said. In
addition to Springleaf and Centerbridge, other private-equity firms
have been eyeing OneMain, and some bidders could team up as they
attempt to buy the Evansville, Ind., lender, some of the people
said.
OneMain is expected to fetch more than $4 billion, one person
said.
Citigroup has said it is open to spinning off OneMain as a
separate public company, selling it or a combination of the two.
OneMain in October filed paperwork with regulators to pursue a
possible initial public offering.
Citigroup tried to sell OneMain in 2011, but investors were
concerned about being able to raise financing for the deal and the
bank was worried about selling for too low a price. Centerbridge
was among those that weighed buying OneMain at that time, teaming
with Warren Buffett's Berkshire Hathaway Inc. and Leucadia National
Corp. before deciding against pursuing a deal.
Springleaf, majority owned by private-equity firm Fortress
Investment Group LLC, has been interested in OneMain for years,
dating at least as far back as 2011, according to people familiar
with the matter. Springleaf couldn't in the past pursue a deal for
OneMain in part because of a burdensome debt load that prompted it
to hire restructuring advisers. But Springleaf cut jobs, narrowed
losses and raised money by securitizing loans and tapping debt
markets. It went public in October 2013.
Fortress owns about 64% of Springleaf. The private-equity firm
acquired a majority interest in the subprime lender for about $125
million in 2010 from American International Group Inc., the insurer
that received a government rescue during the financial crisis.
Write to Mike Spector at mike.spector@wsj.com, Christina Rexrode
at christina.rexrode@wsj.com and Gillian Tan at
gillian.tan@wsj.com
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