The NY Post
reports:
Lehman Brothers' CEO Dick Fuld is seriously mulling a way to take
itself private and out of the public eye...According to sources, talks
internally centering on privatizing Lehman have gotten very serious
consideration after a blistering onslaught of rumors and questions
about the firm's solvency have caused the venerable bond shop to shed
more than 79% this year. Details on how such a take-private maneuver might work are not clear.
However, the rationale is that the free-fall in Lehman's shares, which
tumbled as much as 15% yesterday, is attracting hungry vultures hoping
to snap up the ailing fixed-income shop on the cheap. "The idea is why
sell to someone else at so cheap a price when they could buy
themselves," noted one source.
Lehman has faced a constant stream of bad news in 2008, the latest
being the trouble with Fannie Mae and Freddie Mac, which served
to drag Lehman down 37% last week. An MBO was also suggested by Fox-Pitt Kelton analyst David Trone, who
said Lehman may be better off going private in order to shake off short
sellers that are spreading bogus rumors about the bank. A close of
$12.40 on Monday left the firm with a market cap of $6.85 billion, but
with roughly 30% of the company's stock in employee hands a
take-private is not farfetched if Lehman can line up the debt
financing. Other
options being explored by Lehman include a strategic alliance, an asset sale or a stock buyback to stabilize the firm's footing. Lehman is reportedly also holding talks with South Korean financial institutions about a deal.
- George White
See NY Post story
See Dealscape post on Lehman selling assets
