The board of directors for Evansville-based OneMain Holdings Inc. (NYSE: OMF) has rejected an unsolicited exchange offer from Las Vegas-based IEG Holdings Corp. OneMain calls the offer to exchange one share of its common stock for two shares of IEG common stock "grossly inadequate and reckless."
IEG made the offer on January 5. In a press release, the company says the offer doesn’t reflect the value of OneMain and is not in the best interests of its stockholders.
"Following discussion, our Board was unified in its determination that this offer is an opportunistic lowball offer that does not even remotely begin to value the Company appropriately," said OneMain Chief Executive Officer Jay Levine. "IEG Holdings is not a logical acquirer of OneMain, and the 53% discount that they are offering our stockholders – paid entirely in highly volatile and illiquid stock – is not even close to a sensible value proposition. We urge our stockholders to simply ignore this distracting and egregious offer entirely."
In a filing with the U.S. Securities and Exchange Commission, OneMain says IEG proposed transforming OneMain into a completely online business, "resulting in the closure of over 1,700 OneMain offices, termination of over 11,000 employees, substantial cuts in advertising/marketing costs and other significant cost cutting measures."
OneMain says such a move would "fundamentally damage" its business.