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Christopher Flowers Finds the Bloom May Be Off

Flowers still has a relatively low profile in the U.S., and is perhaps more known for deals he hasn't done than ones he has. According to a person close to J.C. Flowers & Co., the firm has eyed investments in AIG, Washington Mutual and National City in the last 18 months, in addition to a bid it made for Bear Stearns that has been widely reported .

The firm also considered investing in Lehman Brothers on three separate occasions, before offering to buy it just prior to its bankruptcy filing in a joint bid with Bank of America that was rejected by the government. And the firm looked at Merrill several times over the year, but never made an offer.

Choosing not to bid on a financial company, or being outbid, has in general been far better than being the winning bidder over the last year. Another private equity firm, Texas Pacific Group, had a $2 billion investment in Washington Mutual sour, and Bank of America's (BAC - Get Report) purchase of Merrill Lynch has sent the Charlotte, N.C., bank into the arms of the federal government.

However, on what is probably Flowers' highest-profile near-miss, he was saved from another disastrous investment only by rejection. After getting out of an agreement to buy Sallie Mae (SLM) for $60 a share in 2007, Flowers made a revised bid of $50 a share that would now be down by more than 80% if the student lender hadn't walked away.

These near-misses aren't totally painless for Flowers' investors, as they still end up paying related fees to accountants, lawyers and other consultants used in conducting due diligence on the deals. One prospective investor cited that wasted money as a reason for his decision not to invest with Flowers.

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