A bankruptcy judge on Monday approved the sale of Lehman Brothers Holdings Inc’s prized investment management unit to a group of managers and employees.
The sale was worth US$922 million to the Lehman bankruptcy estate, a Lehman lawyer said. It includes the Neuberger Berman money management business.
The employee group won a contested auction earlier this month, beating two other bids. One of those bids came from the private equity firms Bain Capital Partners and Hellman & Friedman, and the other from Crossmark Investment Advisers.
The bid from the Bain and Hellman group would have been worth about US$745 million. The lawyer said Crossmark’s bid was worth less.
Lehman was forced into bankruptcy in September. Neuberger Berman was the last big asset to be sold off in the bankruptcy.
Under the deal, the Lehman estate gets 93 percent of US$875 million in preferred equity, while the new owners get 7 percent of the preferred shares. The Lehman estate would get 49 percent of the common shares while the Neuberger managers would get 51 percent of the common shares in the new company, to be called Neuberger Investment Management.
George Walker, global head of investment management for Lehman Brothers, will be chief executive, and Joe Amato will continue to lead Neuberger Berman, the largest operating unit. Neuberger Berman was founded in 1939 by Roy Neuberger.
The entire investment management unit manages approximately US$160 billion in assets. The deal is expected to close in the first quarter.
END OF A BANK
Lehman Brothers Holdings’ bankruptcy filing was the biggest ever in US history, with assets of US$639 billion and debt of US$613 billion.
Its filing marked the end of what was then the fourth-largest US investment bank.
Lehman has already agreed to sell key US assets to Britain’s Barclays Capital for US$1.35 billion and its Asian, European and Middle Eastern businesses to Japan’s largest brokerage, Nomura Holdings Inc for US$2 billion.