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Rating:Will BofA Get Its Price? Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, July 01, 2009

Will BofA Get Its Price?

Reported by Sean Hanna, Editor in Chief

Did BlackRock's purchase of Barclays Global Investors whack the price Bank of America can get for its Columbia Management asset management arm? That is what a report in London's Financial Times implies in a story posted Wednesday morning. The paper reports that the bidding is "tepid" in wake of last month's blockbuster deal. The current top offer is closer to $2 billion than the $3 billion the bank was hoping to get.

The MFWire.com first reported on June 18 that Bank of America was in the finals process of the sale of Columbia. Sources told this news service that the top three bidders were Nuveen Investments, Invesco and Ameriprise. The FT reports that OppenheimerFunds and Franklin Templeton are also possible bidders, however neither firm has been mentioned as a finalist by sources interviewed by MFWire.com.

The auction is limited to strategic bidders according to the FT, which added that private equity firms were initially interested in the deal. However, one source has told the MFWire.com that private equity remains an option on the back burner if no better deals emerge.

One strategy to goose the price for Columbia that BofA management could consider, reports the FT, is to divide Columbia cleave its money funds from the remainder of the asset management arm to create two separate operations.

Sources have told the MFWire.com that the three top bidders have lesser interest in the money market fund portion of the business. The paper mentions Federated Investors as a firm that "could purchase" the money market operations in a separate deal, but also no sourcing on that speculation. 

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