A bankruptcy judge approved a plan just after midnight yesterday under which Lehman Brothers would sell its investment banking and trading businesses to the British bank Barclays.
The deal was said to be worth US$1.75 billion earlier last week but the value was in flux after lawyers announced changes to the terms on Friday. It may now be worth closer to US$1.35 billion, which includes the US$960 million price tag on Lehman’s Midtown Manhattan office tower.
Lehman filed the biggest bankruptcy in US history on Monday, after Barclays declined to buy the investment bank in its entirety.
The British bank will take control of Lehman units that employ about 9,000 employees in the US.
“Not only is the sale a good match economically, but it will save the jobs of thousands of employees,” Lehman lawyer Harvey Miller of Weil, Gotshal & Manges said.
Barclays took on a potential liability of US$2.5 billion to be paid as severance, in case it decides not to keep certain Lehman employees beyond the guaranteed 90 days. But observers have said Barclays’ main reason for acquiring Lehman is to get its people and presence in North America, making widespread layoffs less likely.
“It’s unimaginable to me that they can run the business without people,” said Lehman’s financial adviser, Barry Ridings, of Lazard Ltd.
Barclays had little competition to land the deal.
Miller said that before it filed for bankruptcy, Lehman had negotiated with just one other bidder, Bank of America Corp (BOA). BOA instead announced on Monday it would buy Merrill Lynch & Co, saving it from a fate similar to Lehman’s. That deal was originally valued at US$50 billion.
Miller said that since Lehman filed for bankruptcy, Barclays had been the only buyer to express interest in acquiring even part of the 158-year-old investment bank.
Lehman lawyers announced a number of changes to the deal before the hearing, which started at 4:30pm on Friday and continued well past midnight yesterday.
Lehman lawyers said the value of stock Barclays will buy and liabilities it will assume has fallen since the start of the week due to market volatility. Under the new deal, Barclays will buy US$47.4 billion in securities and assume US$45.5 billion in liabilities.
Barclays also said it would buy three other units — Lehman Brothers Canada Inc, Argentina-based Lehman Brothers Sudamerica SA and Lehman Brothers Uruguay SA. The two South American entities are part of Lehman’s money management business. Barclays is not paying extra to get the three units.
There was no change to a US$250 million goodwill payment and the purchase of two data centers in New Jersey that will go to Barclays, although Barclays may pay less for them. Lehman’s investment management business Neuberger Berman was not bought by Barclays.
The Securities Investor Protection Corporation liquidated Lehman accounts on Friday under a bankruptcy-style process to transfer assets from 639,000 Lehman customer accounts — about 130,000 of which are owned by individual investors — to Barclays accounts.
SOFT TENNIS: Yu Kai-wen and Huang Shih-yuan narrowly defeated their Japanese rivals to capture Taiwan’s first gold at the Asian Games in Nagoya Yu Kai-wen (余凱文) and Huang Shih-yuan (黃詩媛) won Taiwan’s first gold of this year’s Asian Games, defeating a Japanese duo in a nail-biter in the soft tennis mixed doubles final in Nagoya, Japan, while Johnny Sun (孫家閎) won silver in wushu and Shih Cheng-chung (石政中) won bronze in men’s kumite. Yu and Huang narrowly defeated Japan’s Toshiki Uematsu and Rena Temma 5-4 (2-4, 5-3, 4-2, 1-4, 1-4, 4-0, 1-4, 4-1, 7-5) to give Taiwan its first gold in soft tennis mixed doubles at an Asian Games since 2018. Sun secured Taiwan’s first wushu medal at this year’s game, with a combined score
CALL FOR CHANGE: They urged the UN to facilitate Taiwan’s involvement in the body, recognize its peace efforts and to work with members in preventing military conflict Representatives to the UN from five of Taiwan’s diplomatic allies sent a joint letter to UN Secretary-General Antonio Guterres on Friday, calling for the country’s inclusion in the body. Allies in the letter sent ahead of the 81st session of the UN General Assembly General Debate made three demands in support of Taiwan: inclusion, recognition and camaraderie. They implored the UN to seek an appropriate way to facilitate Taiwan’s meaningful involvement in the world governing body, saying that UN Resolution 2758, which accepted the People’s Republic of China (PRC) as a member of the UN, does not exclude Taiwan. Beijing claims that the
AT-RISK GROUPS: Of the accumulated 1,586 severe cases and 304 related deaths in this flu season, 65.8% were older people and 83.2% had chronic diseases, an official said The Centers for Disease Control (CDC) yesterday said that 165 severe flu cases and 30 flu-related deaths were reported last week, the highest weekly numbers in this flu season, and that cases might continue to increase, urging people to take precautions. Medical visits for flu-like illnesses increased by 1.4 percent to 141,374 last week, with 11.8 percent being emergency visits, showing that the seasonal flu is still in its epidemic period, CDC Epidemic Intelligence Center Director Guo Hung-wei (郭宏偉) said. From Tuesday last week to Monday, 165 severe flu cases and 30 flu-related deaths were confirmed, the highest weekly numbers
Aerospace Industrial Development Corp (AIDC, 漢翔航空工業) has finished production of the nation’s T-5 Brave Eagle (勇鷹) advanced jet trainers, with the final aircraft scheduled to be formally delivered at a ceremony on Thursday. The delivery of the trainer jets marks the end of the program, which dates back to 2017, with the first prototypes completed in 2019. Fifty-six of the 66 trainers had been delivered as of May. The Brave Eagle was developed and produced by AIDC and the National Chungshan Institute of Science and Technology. The program has provided a foundation for the development of a domestically produced next-generation primary trainer and
RSS