Skip navigation
Lehman Video Gallery
Discussing Jamie Dimon' op-ed in the Washington Post today, with CNBC's Steve Liesman & Rick Santelli.
Discussing the deal making front, with Gerald Donini, Barclays Capital head of global equities; Skip McGee, Barclays Cap...
Financial Times columnist Martin Wolf joined CNBC's Geoff Cutmore in the final episode of The Future of Finance to discu...
Jim Chanos, of Kynikos Associates, and Robert Sloan, of S3 Partners, discuss lessons learned from the financial crisis.
The Chinese economy is looking healthy in the short-term, says Fraser Howie, managing director at CLSA. But as he tells ...
Watchlist Sponsored By :


Current DateTime: 03:10:46 15 Nov 2009
LinksList Documentid: 24355697

FEATURED QUIZZES


Current DateTime: 03:10:45 15 Nov 2009
LinksList Documentid: 33793611
  • The Billionaire BFF's

      Philanthropists. Bridge partners. Hockey players. Which responses are based on facts from Buffett's and Gates' real lives?

  • The Many Myths of Coca-Cola

      Can you tell which statements are true, and which ones are just rumors?

  • Think You Understand Markets?

      We've selected some questions from the Financial Industry Regulatory Authority's test of investor knowledge. See how you do ...


Current DateTime: 03:10:46 15 Nov 2009
LinksList Documentid: 24890560
  • Winterizing Your Portfolio

      If 2009 was the winter of our discontent, will 2010 be a winter wonderland for investors? A lot depends on the recovery—or lack thereof.

  • Investor's Guide to Real Estate

      Some even say the long-awaited recovery is here. Regardless, buyers and sellers alike can profit from our guide.

  • Alternative Investing

      Stocks and bonds? Sure. But it's a big world out there for investors.

powered by digg
Lehman Plunges on Doubts About Korean Suitor
By: CNBC.com | 25 Aug 2008 | 10:52 AM ET
Text Size

Lehman Brothers shares fell nearly 8 percent after a top South Korean regulator voiced concern about state-run Korea Development Bank's interest in buying a global bank.

AP

Shares of Lehman Brothers [LEH  Loading...      ()   ], which has been hard hit by the credit crisis, had soared on Friday after KDB said it was open to the acquisition of an overseas financial institution, naming Lehman as one option.

A top regulator on Monday said Korea Development Bank shouldn't buy Lehman but be just a "cheerleader'' and let local private banks take the lead in any such purchase.

KDB said on Friday it was open to the acquisition of an overseas financial institution, naming Lehman as one of its options. The comments sent Lehman's share price up 12 percent on the day.

Also on Friday, banking analyst Richard Bove said Lehman is running out of time to shore up its financial situation and could be subject to a hostile takeover as early as this.

Lehman CEO Richard Fuld "has lost control of the game," Bove said in a live interview by phone. "If he doesn't do something this weekend, as of next week, the game is on."

Bove echoed earlier comments that Lehman is undervalued and that several bidders are likely to emerge soon. He valued Lehman  at $20 a share, well above its current price.

The Korean regulator, Financial Services Commission Chairman Jun Kwang-woo, told reporters on Monday that it would be difficult for KDB to engineer a takeover of Lehman.

"I think that KDB might have considered forming and leading a consortium (to buy Lehman Brothers),'' Jun said. "But it appears burdensome for a state-run institution to play a leading role (in the purchase of a foreign company) and take risks which may be more than financial.''

Cross-border acquisitions by South Korean companies should be led by the private sector and state-run institutions such as KDB should play a ``cheerleader role,'' Jun said.

"My point is that state-run institutions may take a catalyst role in pursuing these kinds of deals.'' Jun also said that KDB needed to consider its priorities before pursuing global expansion, pointing out that stabilization of the domestic financial markets might be the most urgent issue.

When asked about the status of KDB's possible interest in Lehman, one of Wall Street's victims of the subprime mortgage meltdown, he said: "That would be an international marriage. Would you get married just after one or two blind dates?''

KDB has not publicly confirmed that it directly approached Lehman.

The government is planning to privatize KDB by 2012, a process it hopes will help turn it into a global investment bank.

On Friday, banking analyst Bove said that even if KDB doesn't make a bid, it could team up with a US firm to acquire Lehman.

"What the Korean Development Bank is clearly saying," Bove said, "is that 'We know we can't take over Lehman. The United States won't let us. But we've got the money, and if you Mister America want to make a bid, come and talk to us and we'll fund it.' "

As reported earlier by CNBC, Lehman has been trying to sell at least part of its investment management division, including the firm's crown jewel, Neuberger & Berman asset management unit, in an attempt to raise capital.

But potential buyers—which include nearly every major private equity firm—are starting to balk at Lehman's initial offer, according to Wall Street executives familiar with the matter. (Click for more)

Their problem is the price. Lehman is pricing the investment management division at around $10 billion, meaning a 70 percent stake would cost $7 billion. But the real cost will be much more than that, because asset management firms are only worth something if employees remain with them following such a transaction.

—Reuters contributed to this report.

© 2009 CNBC
Tools:
Print EmailAdd This share icon
  • digg share

CNBC HIGHLIGHTS

  • Warren Buffett and Bill Gates spoke to Columbia students, and Buffett made the students a startling offer.
  • Brian L. Roberts
  • For the chief of cable company Comcast, growth has been about making deals – generally very large deals.
  • Some companies may start using insurance to shift carbon risk from their balance sheets to maybe... yours?
  • The president and founder of Genesis Today wants to improve America’s health, and thinks Wal-Mart can help.
  • Switzerland's privacy watchdog is taking legal action to force Google to make changes to its Street View service.
  • A wealthy, distracted Texas driver crashed his million-dollar Bugatti Veyron sports car into a salt marsh, say police.
ADD COMMENTS
Remaining characters


Current DateTime: 01:03:48 15 Nov 2009
LinksList Documentid: 29778428

Current DateTime: 01:02:04 15 Nov 2009
LinksList Documentid: 29779196

Current DateTime: 01:02:04 15 Nov 2009
LinksList Documentid: 29779199

Current DateTime: 01:02:04 15 Nov 2009
LinksList Documentid: 29779198
  Data is a real-time snapshot  *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
A Division of NBC Universal
Thomson ReutersThomson Reuters