Citigroup Said Planning to File IPO for OneMain by End of Month

By Matthew Monks and Dakin Campbell  

Citigroup Inc. (C) is preparing to file to take consumer-lending arm OneMain Financial Inc. public by the end of the month, at which time it will also start soliciting offers from potential buyers, people with knowledge of the matter said.
OneMain is worth at least $4 billion in a sale, said the people, who asked not to be identified discussing private information. SpringLeaf Holdings Inc., the Evansville, Indiana-based personal lender that went public last year, is interested in pursuing a deal for OneMain, the people said.
Citigroup has held talks in recent months with SpringLeaf and
other suitors, though the talks didn’t progress beyond informal discussions, the people said.
Mark Costiglio, a spokesman for New York-based Citigroup, declined to comment, as did Craig Streem, a spokesman for SpringLeaf.
Citigroup Chief Executive Officer Michael Corbat said in May that the bank could exit OneMain through a sale or public offering by year-end or early 2015 because it doesn’t fit with the lender’s business model.
Exploring both a sale and an IPO, known as a dual-track process, can help propel a deal by pressuring buyers to act before a stock offering puts the company in the hands of public investors.

Unwanted Assets

OneMain is part of Citi Holdings, the unit Citigroup created after the financial crisis to house unwanted assets.
Citigroup tried to sell OneMain more than two years ago, failing to reach a deal with bidders including Centerbridge Capital Partners LLC, Leucadia National Corp. and Berkshire Hathaway Inc., a person familiar with the matter told Bloomberg News at the time.
OneMain makes personal loans of $3,000 to $15,000 to people with less-than-stellar credit from more than 1,100 branches, according to its website and Citigroup investor presentations.
SpringLeaf, which has more than 800 branches, dropped 1.5 percent to $34.23 in New York trading yesterday, for a market value of $3.9 billion. Citigroup climbed less than 1 percent to $52.38, giving it a market value of $159 billion.
SpringLeaf and OneMain are the two largest U.S. providers of installment loans.