Today's Outrage: BofA Lowballed (Update)

(Editor's note: This article has been updated since its original publication to reflect that Oppenheimer Holdings has never been interested in Columbia while the unrelated OppenheimerFunds Inc. declined to comment. A clarification also has been published.)

Bank of America's ( BAC) reputation appears to be so tarnished that potential buyers of its Columbia asset management business aren't willing to pay as much as the bank thinks the unit is worth.

Everyone knows Bank of America is desperate for cash so that it can repay the $45 billion in taxpayer bailout funds it received and get out from under the government's yoke.

As a result, tepid bids for Columbia have come in around $2 billion, while Bank of America is looking for a $3 billion price tag, according to the Financial times.

The Columbia unit provides services and money market funds for investment professionals, institutional clients, consultants and individual investors who manage their own accounts.

It's no surprise that potential buyers don't see so much value there, considering the damage done to the entire investing community courtesy of the financial havoc wreaked by Bank of America and the other financial institutions that stoked and provoked the mortgage meltdown.

Blackrock ( BLK), previously considered the most likely buyer, opted instead to snap up Barclays Global Investors for $13.5 billion from Britain's Barclays ( BCS). So the short list of possible buyers is now even shorter - Invesco ( IVZ) , Oppenheimer and Franklin ( BEN), according to the Financial Times.

The newspaper was not clear about which Oppenheimer company was interested, but a spokesman for Oppenheimer Holdings ( OPY) told TheStreet that it is not interested and has never been involved in any discussions with BofA about Columbia. A spokeswoman for the unrelated OppenheimerFunds Inc. declined to comment.

In the end, BofA may split up Columbia in the hopes that the sum of the parts is worth more than the whole. Good luck with that.

The bottom line here is that these are damaged goods, due in no small measure to the considerable erosion of faith in Bank of America's management. With all the questions surrounding CEO Ken Lewis' handling of the Merrill Lynch takeover and all the hidden costs revealed after the fact, bidders for Columbia are probably a little concerned about what they'll be getting.

You can't really blame them for expecting a discount.
Glenn Hall is the editor of TheStreet.com. Previously, he served as deputy editor and chief innovation officer at The Orange County Register and as a news manager at Bloomberg News in Frankfurt, Amsterdam and Washington, D.C. As a reporter, he covered business and financial markets, worked in both print and television in the U.S. and Europe, and conducted in-depth investigative coverage at The Journal-Gazette in Fort Wayne, Ind. His work also has been published in a variety of newspapers including The Wall Street Journal, The New York Times and International Herald Tribune. Hall received a bachelor's degree in journalism and political science from The Ohio State University and a certificate in project and program management from Boston University.