Lehman Spins Off Property Assets
Wednesday, September 10, 2008 14:10
It is an extraordinary time for the banking industry, and for Lehman Brothers, it’s the toughest periods in its history. Lehman Brothers has already fallen by 80% over the last year and today, after revealing a loss of around $3.9 billion for the third quarter, the state-owned Lehman Brothers just announced its plans of selling a majority stake in its lucrative fund management group and hive off its real estate assets. The bank also warns that in an attempt to conserve capital, its dividend would slash from 68 cents to just 5 cents.
The bank is considering all alternatives to boost its shareholder value, so it might consider an outright sale. The bank’s stock fell by 45% yesterday when the Korea Development Bank had pulled out of talks to buy $6 billion of its stake.
Meanwhile, the bank also admitted that it planned to spin off $30 billion worth of its commercial real estate assets early next year into a separately listed vehicle called Real Estate Investments Global. Now, Lehman Brothers is in discussions with BlackRock Financial Management to sell $4 billion of its residential mortgage assets and the bank hopes to complete the deal in the next few weeks.
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