Hulu has employed Guggenheim Partners to advise on a sale of the company, although the financial services firm is considering making its personal bid for the video streaming program, three sources with knowledge of the matter told Reuters.

Guggenheim Executive Chairman Alan Schwartz was first hired by Hulu in 2011 to recommend a sale, but its owners were not able find a buyer prepared to pay the $2 billion that the company’s owners wanted.

Hulu, jointly controlled by Disney and News Corp, has re-engaged Guggenheim to deal with another sale attempt, based on the sources, who spoke on condition of anonymity since the ongoing auction process is private.
Guggenheim is a New York-based investment firm with the help of a fast-growing media business. A spokesman for the firm, Terry Fahn, declined to comment, as did Hulu spokeswoman Elisa Schreiber, News Corp spokesman Dan Berger and Disney spokeswoman Zenia Mucha.
Securities experts state financial services firms are progressively both advising on and playing deals as they become larger and expand into more areas. Although permitted under securities regulations, some corporate governance experts have raised questions about conflicts of interest.
Guggenheim has built “a Chinese wall” between its investment banking and asset management businesses, stated one of the sources.

Another source said Guggenheim has taken steps to maintain the situation “transparent” and it isup to Hulu to determine whether to retain the financial services firm if it makes an offer for the company.
“It’s a certain conflict of interest,” said Ehud Kamar, a professor at USC’s Gould School of Law who focuses on securities law and is an expert on mergers and acquisitions.
“As financial firms get bigger and larger, there is a higher likelihood that this will happen,” he said.

Some other banks that have been on both sides of a deal include Goldman Sachs & Co, which was not compensated a $20 million fee it billed for advising El Paso Corp on its sale to Kinder Morgan Inc. El Paso shareholders had charged Kinder Morgan, alleging that the sale was tainted by Goldman’s stake in the acquirer.
Kinder Morgan settled the match for $110 million. The judge, Delaware Chancery Court Judge Leo Strine, described Goldman Sachs’ behavior as “furtive” and “troubling” though he also told lawyers for the El Paso shareholders that they may possibly have a tough time holding the bank responsible for its actions. Goldman has declined to discuss the matter.

Guggenheim, which states on its website that it manages over $170 billion in assets, made a separate Guggenheim Digital Media unit in January and put former Yahoo Inc and News Corp executive Ross Levinsohn in charge.
Levinsohn has been learning a bid for Hulu, based on the three sources.

Reuters formerly reported that Hulu had reached out to potential customers in March after initially contemplating a deal in which Disney and News Corp might purchase the other out. It is not apparent whether that transaction is still being considered. A third investor in Hulu, Comcast Corp, has quit control as a condition of purchasing NBC Universal.
Former News Corp President Peter Chernin, a one-time Hulu board member and one of its architects, has bid around $500 million for Hulu and provided to assume its $330 million in debt, sources told Reuters in April. A spokesperson for Chernin had no comment on Guggenheim’s role.
Hulu states on its website that it has over 3 million subscribers paying $7.99 a month for its premium program, and that it generated revenues of around $700 million last year. It offers advertising for its free program.
Guggenheim lately headed a group that spent $2.15 billion a year ago to buy the Los Angeles Dodgers baseball team. Its media investments include Billboard, Adweek, The