Low bids forces German bank to cancel Jupiter sale

Commerzbank, the German banking giant, yesterday confirmed it has taken down the "for sale" sign from Jupiter, its UK fund management business, after it failed to find a buyer who would pay a high enough price.

The bank officially put Jupiter on the market in April, but has actually been trying to sell it since last year. It wanted to hive off Jupiter to focus on its core banking business, which is struggling in the current tough market conditions.

The final insult to the plan to sell Jupiter came last month when Jupiter's founder, John Duffield, offered to buy the business back despite an acrimonious and highly public dispute with senior figures at the German bank.

Commerzbank rejected Mr Duffield's advances despite the fact that he offered to pay more than £100m above other offers.

Even this sum would probably have been too low for Commerzbank, which paid £670m for Jupiter when it took control of the business over a number of years in the 1990s.

The bank would have been prepared to accept £500m for the business but, it could not drum up offers of more than £300m, city observers said.

Jupiter's valuation has been hit by the malaise affecting almost all fund managers in the past two years, who have seen the company share prices dragged down as investors have deserted the falling markets.

Commerzbank denied that it would put Jupiter back on the market when the economic environment improved. It said in a statement it would try to boost Jupiter's sales by using its distribution network in Continental Europe.

Edward Bonham Carter, the chief executive of Jupiter, signalled that he would be opposed to the business being put back on the market at a later date, saying: "You can't carry on putting a people business on the market and taking it off." Mr Bonham Carter was tight-lipped on speculation that he had tried to lead a management buyout of Jupiter.