Firms Preparing Bids for CitiFinancial

BlackRock Inc., Spanish bank Banco Santander and more than ten private equity firms are organizing bids for CitiFinancial, a Citigroup consumer-finance business, Reuters said, citing a Bloomberg report. BlackRock, Kohlberg Kravis Roberts & Co. and Warburg Pincus are considering a joint bid for CitiFinancial, Reuters said. Private-equity firms Apollo Management and J.C. Flowers & Co. are also reportedly working on a joint bid.

(Reuters) – Spanish bank Banco Santander SA, BlackRock Inc and more than 10 private equity firms are forming groups to bid for CitiFinancial, a Citigroup Inc consumer-finance business, Bloomberg said, citing people familiar with the matter.

BlackRock, the world’s biggest money manager, and private equity firms Kohlberg Kravis Roberts & Co and Warburg Pincus LLC are considering a joint bid for CitiFinancial, and are in talks to include Santander, according to the report.

The group is one of at least four competing bidding groups being formed for the business, the report said.

Private-equity firms Apollo Management LP and J.C. Flowers & Co also are working on a joint bid, while another bidding group includes Clayton, Dubilier & Rice LLC and Toronto-based Onex Corp, the report said.

Another rival group is a private-equity consortium that includes Blackstone Group LP , Carlyle Group [CYL.UL],Thomas H. Lee Partners LP and WL Ross & Co, the report said.

The deadline for bids has been set for next week, Bloomberg said, saying that Citigroup is trying to get bids for at least book value of about $13 billion.

The sale of the business, which is part of non-core Citi Holdings assets, will be the latest step by the U.S. bank in cleaning up its books in the aftermath of the financial crisis.

People familiar with the matter told Reuters in January that Citigroup is offering up CitiFinancial assets of roughly $12 billion to $13 billion in the auction.

CitiFinancial’s book value could be between $2 billion and $3 billion, but would ultimately depend on how a deal is structured, sources told Reuters at that time. (Reporting by Ransdell Pierson and Soyoung Kim; Editing by Steve Orlofsky, Gary Hill)