On Friday, separate reports in the Wall Street Journal and CBSMarketWatch echoed an earlier Reuters report that State Street had outbid the Bank of New York and a combined proposal from Mellon Financial and ABN Amro (see Deutsche Bank Custody Deal ‘Imminent” ). While the Wall Street Journal Europe said the bid was “about $1 billion,” CBSMarketWatch said the deal was for “roughly $1.2 billion,” with both publications citing people familiar with the matter.
The shift has not been sudden – ever since the German bank starkly announced in its 2001 annual report that it was reviewing its strategic options with regard to these businesses, it was presumed that the bank’s American institutional customers – primarily legacy clients of Bankers Trust – would have to deal with a change of custodian bank.
As a result, for hundreds of US plans which were once serviced by Bankers Trust, the time is drawing near when a decision will have to be made whether to transfer to the new owner or to go out and do a full-fledged search for a new vendor.
The Wall Street Journal said that State Street has also made an offer for Deutsche Bank’s unprofitable index-tracking funds arm, but the German bank hasn’t yet picked a preferred bidder for that business, and there are other strong contenders.
Spokespersons at all of the involved firms have declined comment on the negotiations. An announcement is expected this week.