Mounting chatter about a possible sale of Lehman Brothers to foreign investors is muddying the beleaguered investment bank’s closely watched sale of its asset-management unit, which is anchored by Neuberger Berman, sources tell The Post.
According to people familiar with the matter, Lehman has asked private-equity investors involved in the asset-management auction to submit the next, and perhaps final, round of bids for all or part of the business by Sept. 12.
However, the bidding process has been dogged by talk of Lehman possibly nailing a fat capital infusion from the Korean Development Bank or being acquired outright by parties that include the UK’s HSBC.
Some bidders believe that if Lehman either gets bought out or scores enough capital to emerge from its troubles, it might nix the sale.
As it stands now, Lehman CEO Dick Fuld is in the midst of an unprecedented juggling act that centers on shedding risky real-estate assets from its balance sheet while at the same time raising cash.
“We tend to think of these as mutually exclusive paths and we don’t believe that [Lehman’s] going down both paths,” said one source.
Lehman officials favor a deal in which the Koreans invest in the firm because they believe the franchise will remain intact.
However, if matters become worse for the bank, Fuld will be obligated to consider a Lehman sale.
On the asset-management front, bidders are believed to include private-equity firms Kohlberg Kravis Roberts, Hellman & Friedman and Bain Capital.
Sources said many of these firms were also asked to buy big stakes in Lehman or help the firm go private. However, they passed because the logistics of such a deal would be too complicated, one bank official said.
Private-equity buyers will be bidding on between 50 percent and 80 percent of Neuberger Berman, but could put in offers to buy all of it.
Neuberger is being valued by some private-equity shops at about $4 billion or $5 billion, including debt, or about 10 times Neuberger’s cash flow.
Lehman’s hedge fund business, the largest portion of which comprises its stake in D.E. Shaw, is being valued at between $1.5 billion and $2 billion. D.E. Shaw contributes $250 million to Lehman’s top line, while the rest of the hedge-fund operation contributes around $100 million, according to sources.
Reps for Lehman and the private-equity firms either declined to comment or did not return calls seeking comment.