Once it was clear that Lehman Brothers Holdings Inc. was on the brink of collapse, its demise was like a roller coaster ride. Below, we've compiled a timeline of how the event went down, deal by deal. Also, check out our Lehman Brothers exodus Dealwatch to track the path of Lehman employees.
Sept. 10: Although the Dow Jones was modestly higher in Wednesday morning trading, Lehman Brothers'
third-quarter earnings, in which the investment bank said it lost $3.9 billion on $5.6 billion of write-downs in the third fiscal quarter, put a chill on financial stocks already battered
by the firm's troubles.
The bank announced plans
to sell its asset management business and spin off commercial real
estate as it raced to increase cash and unload troubled assets. Lehman
had announced its results a week early to calm markets after the
company's stock fell 45% on Sept. 9 to $7.79 on reports that
Korea Development Bank had walked away from talks to invest as much as
$6 billion in it.
Sept. 11: The bank continued to crater
as its shares lost another $3.03, or 42%, closing at $4.22 for a
bite-sized market cap of under $3 billion. The day started with talk of
Goldman Sachs Group Inc. (NYSE:GS) as the likeliest bidder, but by afternoon,
unnamed sources at Goldman told Reuters that the firm was not
interested in Lehman. Shortly after, attention swung to Bank of America Corp. (NYSE:BAC) as a buyer, and by the end of the day, word had it, via The Washington Post, that the Federal Reserve was trying to sell Lehman to private equity.
Sept. 12: Shares of Lehman Brothers edged lower in Friday's premarket
electronic trading, as the embattled investment bank tried to locate a
suitor before more market value and confidence was lost.
Sept. 13: The drama surrounding the fate of the bank continued to unfold over the weekend, as top government officials held
their second day of emergency meetings Saturday with the
leaders of the world's top banks at the headquarters of the Federal Reserve Bank of New York in downtown Manhattan. A
Wall Street Journal report indicated that a deal to handle the besieged
investment bank -- either through a sale or liquidation -- could come
as early as that night.
Sept. 15: The 158-year-old New York institution issued a statement early Monday morning announcing that it would declare Chapter 11 bankruptcy,
following the collapse of a U.S. government-led efforts to save the
bank. Bank of America and Barclays plc (NYSE:BCS) pulled their respective bid
proposals after failing to secure guarantees against Lehman's future
losses. Lehman said it would auction the broker-dealer business along
with the previously announced
asset management business.
Reports had named Bain Capital LLC and Clayton, Dubilier & Rice
Inc. as front-runners for the investment management division, which has
an estimated value of $5 billion.
Sept. 17: Barclays and Lehman couldn't agree to a transaction over the weekend; however, the two banks had a $1.75 billion deal in place for Barclays to buy Lehman's North American
investment banking. The deal would save up to 10,000 jobs and secured itself a prominent role in
the annals of the U.S.'s largest bankruptcy.
Sept. 22: Barclays plc, bought the fallen bank's North American investment banking unit in a deal approved Sept. 20, and The Deal took a look at the dramatic and swift reshaping of the Street and asked: "Is it dead?"
Sept. 23: A day after selling its Asian operations to Japan's Nomura Holdings Inc. for $225 million, Lehman also unloaded its European and Middle Eastern operations to the eager bidder. Days later, Nomura pulled out of talks to acquire its bond business.
Sept. 29: As firms continued to pick over the choice parts of bankrupt Lehman Brothers, Bain Capital and Hellman & Friedman LLC struck a $2.15 billion deal
for its asset management division, which includes fund manager
Neuberger Berman, as well as fixed-income, private equity and other
alternative-asset operations.
A Manhattan judge in December approved the sale of Lehman Brothers Holdings Inc.'s Neuberger Berman LLC unit to NBSH Acquisition LLC. A management team led by George Walker, former global head of investment management for bankrupt Lehman Brothers Holdings, won the Dec. 3 auction for the asset management firm and related assets.
Under the deal, the group would pay $813.8 million in new preferred shares for what will be called Neuberger Investment Management; the Lehman estate will retain a 49% common equity stake in Neuberger.
- Sara Behunek
Also see:
The Lehman collapse: What we're looking at
Lehman's collapse, a decade in the making
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