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Officials at troubled brokerage firm Lehman Brothers [LEH
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] have weighed the sale of at least part of its Neuberger Berman asset management unit, sources told CNBC.
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CNBC.com |
If Lehman sold the entire unit, the deal could fetch around $8 billion for the cash strapped Wall Sreet firm, the sources said.
Such a move could also come at a big cost for Lehman, the smallest of the major Wall Street investment banks, as it removes a very profitable part of the business and would make it difficult to be competitive as a stand alone company.
Ratings agencies may also have a problem with Lehman spinning off even a chunk of Neuberger because it provides a stable source of revenue -- a factor that may cause the brokerage to have second thoughts, just as Merrill Lynch [MER
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] did when it recently decided against selling a chunk of its stake in money manager BlackRock following ratings agency concerns.
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Lehman, which has already raised about $12 billion of capital this year to strengthen its balance sheet, needs more capital to plug the holes because of possible writedowns of bad assets on its books and may be left with no choice but to unload a chunk or all of Neuberger, people close to the firm said.
Lehman purchased Neuberger in 2003 for $2.6 billion,and the deal has been considered a success, but times have changed since.
CNBC was first to report that the top executives at Neuberger, including legendary fund manager Marvin Schwartz (who is also one of the top individual shareholders in Lehman), have recently been pushing Lehman CEO Dick Fuld for a spin off of Neuberger amid Lehman's problems, which include writedowns, losses and the dillution of their shares received during the sale.
A Lehman spokeswoman had no comment.
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