June 6, 2008 / 4:25 PM / 10 years ago

Citi gets initial bids for Primerica unit: sources

NEW YORK (Reuters) - Citigroup Inc (C.N) has received the first round of bids for Primerica Financial Services, its insurance and mutual fund sales unit, drawing interest from several life insurance and private equity companies, people familiar with the matter said.

The Citigroup sign is seen outside the Citigroup Center in New York, October 1, 2007. REUTERS/Shannon Stapleton

With Primerica valued at about $7 billion, Citi is now trying to match various bidders into groups that could bid for the unit together, a source said on Friday.

Press reports have identified the unit as a candidate for sale as Citigroup tries to restore profitability after huge losses tied to flagging mortgage and credit markets, but the bank has never confirmed it was on the block.

Citi declined to comment.

A deal for the business, one of Sanford Weill’s first acquisitions as he built the financial services empire that ultimately became Citigroup, could come by the end of this summer, the sources said.

Weill, who retired as Citi’s chief executive in 2003 and is now the bank’s chairman emeritus, bought Primerica in 1988 through his initial holding, a Baltimore-based consumer lender called Commercial Credit.

Primerica serves 6 million clients in the United States, Canada and Spain and has more than 100,000 licensed representatives. The unit sells term life insurance and mutual funds. It also offers services to help families get rid of debt.

Primerica posted net income of $544 million in 2007, down 5 percent over the previous year.

Vikram Pandit, who became Citi’s chief executive in December, succeeding Weill’s handpicked successor Charles “Chuck” Prince, said last month he plans to reduce $500 billion of non-core “legacy” assets to below $100 billion in two to three years.

Earlier on Friday, Citi said it will shut down its remaining Japanese consumer lending outlets and automated loan machines.

Citi, which operates a consumer lender under the brand name Dic, said it would close its last 32 outlets and 540 unmanned loan machines and suspend marketing the brand.

Citi’s shares closed down $1.16, or 5.5 percent, at $20.06 on the New York Stock Exchange.

Editing by Jeffrey Benkoe, Phil Berlowitz

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