Apollo, Varde Buy Fortress's OneMain Stake for $1.4 Billion

(Bloomberg) -- Apollo Global Management LLC and Varde Partners agreed to buy Fortress Investment Group's stake in consumer lender OneMain Holdings Inc. for $1.4 billion.

The investment firms will pay $26 a share for a 40.5 percent position in OneMain, according to a statement Thursday. The deal is expected to be completed in the second quarter.

The price is 2.4 percent below where OneMain shares closed Wednesday. The stock jumped 27 percent, the most since March 2015, to $33.78 as of 9:47 a.m. in New York.

OneMain was exploring a full sale in recent months, a person with knowledge of the process said in October. The Evansville, Indiana-based company, which was a subprime lender named Springleaf when Fortress invested in it in 2010, makes car and other personal loans to people who have trouble borrowing money elsewhere. In 2015, Springleaf acquired OneMain from Citigroup Inc. for $4.25 billion.

“As one of America's premier consumer finance companies, we believe OneMain is exceptionally well-positioned for continued growth and innovation,” Apollo partner Matthew Michelini said in the statement.

OneMain has been among New York-based Fortress's best-performing investments. The firm paid $125 million for the stake in the lender.

Fortress became a unit of Japan's SoftBank Group Corp. last week.

Barclays Plc was lead adviser to the Apollo and Varde investor group, and Sidley Austin LLP served as legal counsel. Goldman Sachs Group Inc. also advised the buyers. Citigroup advised Fortress and Cravath Swaine & Moore LLP provided legal counsel.

To contact the reporter on this story: Devin Banerjee in New York at dbanerjee2@bloomberg.net.

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Phil Serafino

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