SunTrust Fails Again with RidgeWorth Sale

SunTrust Banks should just face it: It may need to sell asset management unit RidgeWorth Investments to a financial buyer.

The Atlanta-based bank thought it had a deal to sell portions of Ridgeworth to UK investment manager Henderson Group, but late yesterday said that talks had died (adding that it would continue to review “strategic options”).

A sale of RidgeWorth was optimistically expected to fetch between $400 and $600 million.

SunTrust has been trying to sell RidgeWorth for nearly a year — as it attempts to repay $4.9 billion in TARP funds — and has now failed twice. The first try was last summer, when SunTrust was approached by a small group of investors but ultimately chose a runaway bride.

Late last year, SunTrust went back to the original bidding group and rekindled talks. The second “process” (there wasn’t really an auction”) included interest from BNY Mellon and Putnam Investments. By April, Henderson disclosed it was in talks to buy portions of RidgeWorth (strike #2).

So what’s a bank with a big bill to do? Keep trying to sell, of course (particularly as multiples continue to rise). But this time SunTrust should target private equity, which finally has easy access to credit and plenty of equity capital to spend…