Auction of PE business hits impasse after price raised
Print Edition
The auction of JP Morgan Chase’s private equity business, One Equity Partners, in the market since at least November, has hit an impasse, according to three people with knowledge of the situation.
Two people close to potential buyers said the bank “pulled” the business off the market. Another source, active in the secondary market but not directly involved with the process, described the auction as stalled after the bank increased its asking price.
“The bid/ask spread has widened dramatically,” the secondary source said. “It’s hard to imagine someone stretching to that level. There’s a lot of disappointed buyers.”
Sources said the bank could revive an auction of One Equity at any time. “The question is, do they try and come back six months from now, or never?” one source said.
A spokesperson for JP Morgan Chase declined to comment.
The bank said last July it was spinning off One Equity, its last remaining private equity operation, because the unit was not core. JP Morgan Chase was not under regulatory pressure to sell: One Equity would not be affected by the Dodd-Frank financial reform law, which restricts the ability of bank holding companies to own and operate private equity groups, Reuters reported last year.
Potential buyers were bidding for a portfolio of buyout and growth equity investments valued at over US$4 billion, according to sources. The winning bidder was likely to give to a new fund the team would raise as an independent firm.
Under the deal, One Equity wanted up to US$2 billion to fund new deals, Dow Jones said in November.
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