Citi gets initial bids for $7bn Primerica

(AFP)

Citigroup 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.

With Primerica valued at about $7 billion (Dh25.6bn), Citigroup is now trying to match various bidders into groups who could bid for the unit together, a source said.

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 six 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 commissions and fees revenue of $455m in 2007, compared with $399m in 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" assets to below $100bn in two to three years, largely through sales.

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