No Bailout? So What? Lehman Finds Buyers

Barclays deal refined by bankruptcy court, and Japan's Nomura targets Lehman's Asia and Europe operations.
Stephen TaubSeptember 22, 2008

In a sense, Lehman Brothers is surviving after all, despite the U.S. government’s refusal to bail it out.

The U.S. Bankruptcy Court approved the sale of substantially all the assets of Lehman Brothers Inc., to Barclays Capital just days after the gilded investment bank filed for bankruptcy. Court approval means that the hundreds of thousands of Lehman customer accounts can be transferred without undue interruption, instead of going through a lengthy brokerage liquidation process that can take weeks and impair customer access to cash and securities, the Securities and Exchange Commission pointed out in an announcement.

The transfer of most retail accounts, holding over $100 billion in assets, is expected to be completed within days. The regulator noted that the court’s decision followed a marathon 11-hour hearing in a packed Manhattan courtroom.

“Every investor and every market participant, not just Lehman’s customers and employees, has every reason to cheer today’s court decision,” said SEC Chairman Christopher Cox.

Meanwhile, Nomura Holdings Inc., Japan’s biggest brokerage, reached a deal to buy the Asian operations of Lehman for $225 million, the Associated Press reported. An earlier Bloomberg News report said that Nomura was in negotiations to buy Lehman’s European investment banking and equities units, too, with a deal perhaps to come in the next two days.

“We are now focusing on one party as they are interested in acquiring a wider team, which should result in a better deal for staff and creditors,” Dan Schwarzmann, partner with PricewaterhouseCoopers, told Bloomberg. PwC has been seeking buyers for the European units, the wire service noted.

Meanwhile, Lehman also is in talks to offer its investment-management unit to private-equity bidders Bain Capital LLC and Hellman & Friedman LLC, according to Bloomberg, citing people familiar with the negotiations.