Lehman Working Feverishly on Asset Sales
Lehman Brothers Holdings Chief Executive Dick Fuld continues to work feverishly on possible transactions that will help the investment bank drum up much-needed capital and offset possibly billions in further writedowns, according to people with knowledge of the matter.
Fuld is pursuing the sale of the firm's entire commerical mortgage debt book in a complex deal that involves financing from a third party, these people say. That deal could be announced anytime in the next two weeks.
At the same time, Lehman continues to keep its options open, and is shopping a huge chunk of its Neuberger & Berman asset management unit, either by itself or through a sale that involves the entire investment management dvivision. This transaction could involve Lehman selling as much as a 70 percent stake in the asset management business, but retaining 30 percent interest, according to people briefed on the matter.
The sale of the commerical mortgage business appears highly likely. However, the assets, which include commercial and subprime mortgage related holdings, it will likely do so at a steep discount, and could force Lehman to take further writedowns and force the need to raise additional capital.
However, it is possible Lehman won't move ahead with the sale of Neuberger and the rest of the investment management division because rating agencies will frown on selling even a piece of this revenue producer. This unit includes not only Neuberger, but also stakes in hedge fund DE Shaw and GLG Partners as well as some private equity funds.
Officials at Lehman had no immediate comment.