BusinessBusiness RecoveryExecutives snap up Lehman’s Neuberger without cash

Executives snap up Lehman's Neuberger without cash

Executives snap up Lehman's Neuberger Berman in a management buyout without handing over any cash

Neuberger
Berman
executives have snapped up the Lehman Brothers-owned mutual fund
manager, estimated at a value of $5bn to $6bn six months ago, out of an auction
without handing over any cash.

In the deal, the executives will hold 51% of Neuberger and creditors agreed
to wait for a payoff through Neuberger’s future earnings. Creditors will own 93%
of a separate preferred stock issue currently valued at $875m (£591.5m), which
they expect to sell when market conditions improve, according to The Wall
Street Journal
.

As late as yesterday, the Neuberger auction was in deep trouble after the
deadline had been extended twice and several private-equity firms, including the
Carlyle Group, had backed out and other private-equity firms Bain Capital and
Hellman & Friedman quit an agreed $2.15bn offer, signed in September.

But rather than a failed auction, which would have been a humiliating result
for Neuberger’s leaders, they gained a bargain.

Further reading:

KKR favourite in bid for Lehman Bros

Read
The Wall Street Journal story

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