Posted on 09/16/2008 11:22:45 AM PDT by Fred
LONDON Barclays PLC was close to a deal to acquire a large chunk of Lehman Brothers Holdings Inc.'s U.S. operations for just under $2 billion, according to people familiar with the situation.
The deal, for now, would allow Barclays, the U.K.'s third-largest bank in terms of market value, to buy Lehman's U.S. broker-dealer unit a day after parent Lehman Brothers Holdings filed for Chapter 11 bankruptcy protection. Barclays had been in talks over the weekend to buy the entire firm before walking away because Barclays couldn't obtain U.S. government support for Lehman's $85 billion in souring assets or backing for Lehman's balance sheet.
Under the parameters currently being discussed, however, Barclays potentially could leave behind Lehman's troubled assets at the parent level, which is now going through a bankruptcy proceeding.
The deal could still change or fall apart, according to these people.
Barclays' acquisition of Lehman Brothers' U.S. operations is expected to include Lehman's Seventh Ave. office in mid-town Manhattan, say people familiar with the matter. The office tower has more than one million square feet of office space. Two data centers in New Jersey will also be part of the transaction, negotiated by a team of about 100 people over the last two days.
Lehman's Canadian operations will also be included.
Lehman's troubled real-estate holdings, plus its private-equity interests, will remain with the holding company.
Lehman has been asking the Federal Reserve to extend it credit facilities until a sale can be completed, said another person familiar with the matter
For now Barclays is targeting only the U.S. broker arm, although bankers in Lehman's European arm, which is headquartered in London, are holding out hope the acquisition would include the London operations, including investment banking and stock sales and trading. But for now, Barclays' main goal is to complete
(Excerpt) Read more at online.wsj.com ...
Their bankruptcy filing lists more assets than debt. $639 Billion in assets and $613 billion in debt. Given those staggering numbers a $2 billion sale isn’t going to change much.
Lehman is history. Barlays is buying only the Capital Markets assets.
They werent buying all that.....they are getting $16 billion in assets for $250 million cash.
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