OMF

Please note, on 11/27/15 Springleaf Holdings Inc (LEAF) changed it’s company name and ticker to OneMain Holdings, Inc. (OMF). The content of this idea will make reference to the original company name and ticker symbol.

Publicly traded companies mentioned herein: Citigroup Inc (C), Fortress Investment Group LLC (FIG), LendingClub Corp (LC), Springleaf Holdings Inc (LEAF)

Highlights

The presenter is long shares of consumer finance company Springleaf Holdings (LEAF), and sees the potential for 50% - 60% upside to the stock price from current levels ($47 - $48) if its $4.25 billion cash deal to acquire OneMain from Citi is ultimately successful. LEAF has been growing receivables 20% - 25% as-is (currently ~$6 billion), and adding OneMain would create a personal finance company with ~$14 billion in receivables and pro forma net assets of $22 billion. However, the DOJ issued a civil investigative demand (CID) to both Springleaf and OneMain, which has created uncertainty about the regulatory hurdles that might need to be met to close the deal in the third quarter of 2015, per management guidance. He views this overhang as an opportunity to acquire shares at a favorable entry point.