The media is rife with reports that Citigroup (NYSE: C) has put its consumer lending unit up for sale. By some accounts, up to 10 private equity firms and other financial institutions like BlackRock and Santander are considering making a bid.

We're seeing the formation of several clubs that will compete for the unit. It's unclear exactly how these clubs are shaping up. But various media outlets have reported that BlackRock is teaming up with KKR, Warburg Pincus and possibly Santander to make a big bid. BlackRock has made clear it does not see the unit as a strategic partner but rather an investment to be made with client money.

Former Citi president Robert Willumstad is leading another group that includes the Blackstone Group, Carlyle Group, Thomas H. Lee Partners and WL Ross. Apollo Management and J.C. Flower& Co. are also working together, as are Clayton, Dubilier & Rice and Onex.

All of this seems pretty fluid right now. We could see some re-jiggering among the groups. But this is exciting. There's nothing like a good old-fashioned auction to crank up the emotions. This isn't the RJR Nabsico auction but it's as good as it gets right now--unless another bidder were to appear for the NYSE Euronext.

One issue is how much CitiFinancial would fetch. The speculation has ranged from $2 billion all the way to $13 billion. Another round of bids will be due within a few weeks. So we may see some narrowing at that point.

For more:
- here's a Financial Times article

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