Suitors are losing interest in buying Citigroup’s $13 billion subprime lending business, The Post has learned.
Citigroup has been trying to sell its CitiFinancial unit and its more than 1,500 branches for $2 billion in an effort to reduce the size of unwanted assets grouped under CitiHoldings.
Now, sources close to two of the three remaining bidders say they have lost interest.
The groups that have dropped out include the Brysam Capital, Blackstone, Carlyle, THL Capital and WL Ross bidding team; and the team of Apollo Management and JC Flowers, sources said.
Private-equity firms Clayton, Dubilier & Rice and Onex form a third bidding group.
Still, Citigroup expects to complete the sale and name a winner in “several weeks,” a source said.
Bidders are not happy with the financing package Citi is offering, believing it will not allow them to achieve desired returns. Citi, while trying to entice prospective bidders, is reluctant to sell the assets at less than book value, sources said.
Citigroup, if it sells these assets at less than book value, will signal that many more of its non-core assets are worth less than where they are marked, a banker said.
Fortress Investment Group, whose team includes former Fannie Mae head Daniel Mudd, has interest in CitiFinancial, sources said, but Citigroup has been reluctant to include it in the auction.