It's been a tumultuous and rather embarrassing four months for Deutsche Bank and Guggenheim Partners.

The saga started in November when the German bank decided to put its global asset management division up for sale. That unit includes DWS Americas, the mutual fund business in the Americas, DB Advisors, the global institutional asset management business, and Deutsche Insurance Asset Management, the global insurance asset management business.

In February, it looked like the bank found a buyer in Guggenheim Partners. Deutsche Bank even issued a statement that "it is in exclusive negotiations with Guggenheim Partners on the sale of its asset management businesses that are subject to a previously-announced strategic review."

But two weeks ago, DB switched gears and said the two sides "mutually agreed to end exclusive negotiations about a potential sale" of the three businesses.

Instead, DB said the two firms agreed to focus exclusive negotiations only on a potential sale of RREEF, its global alternative asset management business, which includes real estate, infrastructure and private equity.


According to a Reuters report, Guggenheim's $1.81 billion bid for the unit fell apart after DB withdrew an offer to guarantee the unit's revenue, citing a source familiar with the situation. The report explained that DB had agreed to a deal structure where it would guarantee any shortfalls in revenue up to $1 billion for five years, off a revenue baseline of $1.5 billion.

However, DB, which believed the sale would still add to its capital even with the guarantees in place, realized its assumption was wrong and the guarantee was suddenly off the table, prompting Guggenheim to lower the price it had offered for the business, according to the unnamed source.

Mayura Hooper, a DB spokesperson, denied that the revenue guarantee or price cut were the reasons that the deal fell apart.

"The characterization around the guarantee and price reduction is incorrect," she said.

Incorrect? How?

Hooper declined to further comment on the situation and Guggenheim has remained mum throughout.

The two firms are stumbling through an awkward dance.

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