Is Gov't Brokering Lehman Takeover?


After hours the Washington Post reported that there could be new buyers, at least potentially, for Lehman Brothers. According to the Post, the Treasury and Fed are negotiating with a syndicate of private equity firms to take over Lehman Brothers . The news sent shares lower in after hours trade.

CNBC’s Steve Liesman contacted his sources at the Treasury, which confirmed the talks, however he says to characterize it as the Treasury engineering a takeover goes beyond where the Treasury is at.

As first reported by CNBC, Lehman CEO Richard Fuld has been talking to several financial institutions about a potential purchase, reminds Charlie Gasparino, with Bank of America among the possible suitors.

However, it remains unclear just how interested these institutions are in a complete purchase. It's also unclear what price Lehman could fetch.

What’s scary is, if the Treasury is putting together a consortium, that means Dick Fuld could not sell the bank today, Gasparino concludes.

“We’ve been concerned about Lehman for quite some time,” adds Sean Egan, president Of Egan-Jones Rating Co. “The current problems are manifestations of things that were already in the portfolio before. The problem right now is that it’s not self-sustaining.”

“And as for Bank America being mentioned as a suitor…. CEO Ken Lewis doesn’t like investment banking firms,” Egan adds. “I don’t think they’re a suitable buyer for Lehman.”

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