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 More rumors are swirling about white knights for Lehman Brothers Inc. as analysts expect $3.5 billion in write-downs when the investment bank reports its third-quarter earnings.
Several possible white knights and options have been presented in
reports over the past few weeks. Some of the most recent rumors
targeting the bank include the possibility that HSBC Holdings plc could be
interested in bidding for the bank. The Deal's George White
reported Wednesday that a HSBC-led consortium may be
preparing a bid for a Lehman stake along with Korea Development Bank
that has apparently floated a separate offer of $5.3 billion for a 25% stake in
the investment bank.
CNBC's Charlie Gasparino also reported this morning that investors are looking to sell the bank and HSBC could be a possible bidder for Lehman. "I spoke to a fairly large investor in Lehman who has heard from two reliable sources that HSBC is interested in a stake or maybe the whole thing," he said. Korea Development Bank talks have been confirmed, and the bank could use Lehman as part of its expansion to ready itself to go public by 2009, and the transaction would likely be approved by lawmakers. Potential investors also apparently include a number of U.S. hedge funds and an unidentified Chinese bank, according to a report in in South Korean newspaper Daily Chosun Ilbo. However, Mitsubishi UFJ Financial Group won't be one of them. The company said it has no plans to invest in Lehman Brothers, according to a Reuters report. Lehman reportedly has also been reviewing bids from buyout shops for both Neuberger Berman LLC and minority stakes in several hedge funds, as it searches for ways to shore up its capital position. Kohlberg Kravis Roberts & Co., Hellman & Friedman LLC and Bain Capital LLC are reportedly all in the auction, which could fetch $7 billion or more. However, because Neuberger Berman is a prized asset, a potential deal with Korea Development Bank could kill the sale. Lehman has already raised about $12 billion, which according to a Reuters report "may not be enough." Analysts and media reports have been stressing the immediacy of Lehman's situation for months as stocks have swayed up and down as investors fear that Lehman could crash like Bear Stearns Cos. - Maria Woehr See Dealscape: PE firms close in on Lehman's asset management unit See Dealscape: Will a Lehman-KDB deal kill Neuberger Berman auction? See Dealscape: Report: KDB floats offer of $5.3B for 25% of Lehman Categories Deal Video
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