Lehman likely to reap $7 b in Neuberger sale
Lehman Brothers Holdings may reap $7 billion by selling Neuberger Berman, its asset-management unit, as mortgage-related assets further erode capital.
By Bloomberg |
NEW YORK: Lehman Brothers Holdings may reap $7 billion by selling Neuberger Berman, its asset-management unit, as mortgage-related assets further erode capital, said analyst Brad Hintz at Sanford C Bernstein.
Estimates for the unit���s value by four analysts ranged from $6.5 billion to $13 billion. Lehman, the fourth-largest US securities firm, paid $3.2 billion for Neuberger Berman in 2003 and more than doubled assets under management in five years. As Lehman dumps mortgage-backed securities at a discount, the firm could sell a piece of the unit to cover losses.
���Neuberger Berman is a good asset,��� said Tom Jalics, a Cleveland-based analyst at National City Bank, which manages $34 billion, including Lehman shares. ���If they sold the whole thing, then they���d run out of bullets. How do you know you won���t need more cash four to five months from now?���
Lehman chief executive officer Richard Fuld is struggling to regain investors��� confidence after Lehman shares tumbled 82 per cent this year and the firm recorded a $2.8 billion loss in the second quarter. In June, Fuld removed his top associate of 30 years, president Joseph Gregory, and replaced him with Herbert ���Bart��� McDade, a younger executive who���d run fixed income and equities. Kerrie Cohen, a Lehman spokeswoman, declined to comment on the company���s plans for asset sales.
Estimates for the unit���s value by four analysts ranged from $6.5 billion to $13 billion. Lehman, the fourth-largest US securities firm, paid $3.2 billion for Neuberger Berman in 2003 and more than doubled assets under management in five years. As Lehman dumps mortgage-backed securities at a discount, the firm could sell a piece of the unit to cover losses.
���Neuberger Berman is a good asset,��� said Tom Jalics, a Cleveland-based analyst at National City Bank, which manages $34 billion, including Lehman shares. ���If they sold the whole thing, then they���d run out of bullets. How do you know you won���t need more cash four to five months from now?���
Lehman chief executive officer Richard Fuld is struggling to regain investors��� confidence after Lehman shares tumbled 82 per cent this year and the firm recorded a $2.8 billion loss in the second quarter. In June, Fuld removed his top associate of 30 years, president Joseph Gregory, and replaced him with Herbert ���Bart��� McDade, a younger executive who���d run fixed income and equities. Kerrie Cohen, a Lehman spokeswoman, declined to comment on the company���s plans for asset sales.
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