Private equity firms Bain Capital, Clayton Dubilier & Rice and Hellman & Friedman are in discussions to buy the investment-management unit of Lehman Brothers, according to a report from Bloomberg News.
A deal may be reached within days, according to the article, which cites four people with knowledge of the proceedings. Lehman is trying to sell the unit off as quickly as possible now that it is under Chapter 11 bankruptcy protection. The investment management unit includes its private equity and real estate arms – Lehman Brothers Merchant Banking and Lehman Brothers Real Estate – and groups managing venture capital, infrastructure, credit and funds of funds.
The sale is part of an auction Lehman announced last week to save the firm. The bank initially sought to sell a 55 percent stake in the investment unit. Initial bids of $5 billion (€3.5 billion) at the auction last week are now valued as too high following Lehman’s bankruptcy filing, according to the article.
The 158-year-old investment bank, Wall Street’s fourth largest, entered the biggest bankruptcy filing in US history yesterday after potential deals involving Bank of America and UK bank Barclays fell apart over the weekend.
Lehman’s, which has about 25,000 employees worldwide, lost billions of dollars on its mortgage securities and commercial real estate positions. In its bankruptcy filing, the bank listed $639 billion in assets and $613 billion in debts.