has decided to sell a business that it acquired in the deal to buy Bisys Fund services
. Sources told The MFWire
that Citi has put the Financial Research Corporation
on the block.
After announcing the Bisys deal last year, a Citi executive told Reuters
that the company planned to hold on to FRC as it was a "hot property." (see MFWire
June 1, 2007). But now, Citi is looking to part with that property.
Sources familiar with the sale process told The MFWire
that there are several bidders in the running for the company including: FRC founder Neil Bathon
, who recently formed a company similar in scope to FRC; Strategic Insight
, rumored to be on the block itself; and possibly even Morningstar
(under Thomson Reuters). One source said that FRC generates revenues of close to $5 million a year.
A deal may already be close for FRC's sale; one source said that Citi already had a bid from a potential buyer that it believes is acceptable.
A spokesman for Citi told The MFWire
that the company does not comment on rumors.
, director of research at Strategic Insight, declined to comment. Morningstar spokeswoman Alexa Auerbach said the company does not comment on market rumors as policy. Clare Arber, a spokeswoman for Lipper, said the company does not comment on market speculation.
Contacted for comment, Bathon told The MFWire
: "I have been interested in re-acquiring FRC since the day it was sold to Bisys (now Citi) back in 2001. Even today I would much prefer to reunite directly with my former clients and staff rather than building a competing organization."
Former FRC president Michael Evans
recently joined Bathon as head of his new company, FUSE Research Network
. An FRC spokesperson told The MFWire
last week that Bruce Treff
took over Evans' duties. Meanwhile, a September 3 job posting
for the role of FRC president still appears on the Citi Web site. It was not clear if Treff is an interim replacement for Evans.
FRC staffers have been notified of the impending sale, a source said.
The sale comes amid a scramble for capital at Citigroup, following heavy losses on subprime bets. The company recently sold CitiStreet
, its joint venture with State Street, to ING for almost $900 million in a deal that closed earlier this year.
FRC was founded by Bathon in 1987. The company was acquired by The Boston Institutional Group in 1996 and then by Bisys in 2001, which was in turn acquired by Citigroup in May 2007.
Bathon left FRC in June of 2006 and was replaced by Mark Phillips
. (see The MFWire
May 18, 2006) .
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