Sat, Apr 09, 2011 - Page 10 News List

Firms bidding for Citigroup unit

Bloomberg

Cerberus Capital Management LP and Centerbridge Capital Partners LLC are among firms bidding for Citigroup Inc’s US consumer-lending unit, said three people with knowledge of the matter.

Cerberus and Centerbridge are competing with at least three other parties for the Baltimore-based OneMain Financial unit, previously known as CitiFinancial, said the people, who declined to be identified because the matter is private. A group that included Warburg Pincus LLC withdrew from the process, one person said.

Citigroup chief executive officer Vikram Pandit, 54, started an auction for OneMain this year after tagging the business for sale in 2009 as part of a strategy to offload US$600 billion of the New York-based bank’s unwanted assets.

About US$13 billion of OneMain assets are included in the auction, people with knowledge of the matter said last month. The book value of the business is about US$2 billion, net of liabilities, they said.

OneMain lends money for purposes including auto and appliance repair, medical bills and remodeling kitchens, according to its Web site. Before the unit was rebranded in December, the Web site carried the tagline: “Money for life’s emergencies or just fun.”

This has since been changed to “money for life’s emergencies,” Mark Rodgers, a Citigroup spokesman, said in an e-mail.

Spokesmen for Cerberus and Centerbridge declined to comment.

Robert Willumstad, 65, Citigroup’s former president, is leading a separate bidding group through his Brysam Global Partners, people familiar with the matter said last month. That group includes Blackstone Group LP, Carlyle Group, Thomas H. Lee Partners LP and WL Ross & Co, the people said.

Private-equity firms Apollo Management LP and J.C. Flowers & Co are also working on a joint bid, the people said. Apollo is already in the mortgage business — a part of the OneMain portfolio — through its 2008 investment in Vantium Capital, which buys residential mortgage assets.

Another bidding group includes Clayton, Dubilier & Rice LLC and Toronto-based Onex Corp, the people said.

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