Lehman Brothers courts private equity to buy unit

August 19, 2008 | By Jim Kim

So the rumors turned out to be true. Lehman Brothers is indeed shopping around its asset management unit, which includes Neuberger Berman, acquired five years ago for $2.6 billion, Lehman Brothers Asset Management and a private client brokers group. The New York Times reports Lehman has sent MOUs to a raft of private equity firms, including Kohlberg Kravis & Roberts, J.C. Flowers, the Blackstone Group, Carlyle Group and others. It invited bids on all or part of the unit. This is surely a sign that third quarter earnings may well be negative and that another capital raise will be required. Another step, more dramatic, would be to sell the whole company. The asset management unit provided a measure of diversification. If you sell those, you end up with the old Lehman. This nuclear option is not out of the question.

For more:
- here's the New York Times article