* Buyers and seller at odds on price
* Bank sees business as non-core
* Auction could be revived
By Chris Witkowsky
NEW YORK, March 8 (Reuters-peHUB) - 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
"The bid/ask spread has widened dramatically," the secondary
professional 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 announced 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,
sister news service Reuters reported last year.
Potential buyers were bidding for a portfolio of buyout and
growth equity investments valued at more than $4 billion,
according to sources. The winning bidder was also expected to
contribute to a new fund the team would raise as an independent
As part of the deal, One Equity, which has been investing
off the bank's balance sheet, wanted $1.5 billion to $2 billion
in funding for new deals, Dow Jones reported in November.
Without a deal in place, One Equity team would likely have
to move forward without any new capital from the bank. One
Equity is drawing from "outstanding capital commitments" from
the bank until starting its next fund, which would be raised
from external investors, according to One Equity's website.
The group is led by Dick Cashin, who founded the group in
2001. Since then, One Equity has managed $14 billion in total
investments and committed capital for JP Morgan Chase.
The bank has shed its other private equity groups over the
years. JP Morgan Partners spun out into independent firm CCMP
Capital Partners, and Corsair Capital, which the bank formed in
1993 to invest into opportunities created by the savings and
loan crisis, spun out in 2006.