Posts filed under “Bailouts”
Its Friday night after a long week, and we all have things to do. But I couldn’t sign off without passing along these two tidbits:
1) Lehman received offers for its asset-management unit from private-equity firms, including Bain Capital and Clayton Dubilier & Rice.
2) The Fed canceled their usual Friday night poker game, and instead called an Emergency meeting.
Here are the details, first on the Private Equity bid, via Bloomberg:
"The bids value the unit, which includes the Neuberger Berman fund business, private-equity funds and a brokerage firm serving wealthy individuals, at about $5 billion, said the people, who asked not to be named because the auction is private. KKR & Co. LP, which was weighing an offer, hadn’t made a bid by the 5 p.m. deadline, the buyout firm told people involved in the process.
Lehman said Sept. 10 it would sell 55 percent of the investment unit, part of Chief Executive Officer Richard Fuld’s plan to keep the 158-year-old firm independent. After its shares dropped 53 percent in the next two days, Fuld, 62, began talks with companies including Bank of America Corp. to sell all of Lehman, potentially derailing the investment-management auction. . . . Blackstone and Carlyle Group had weighed bids for the investment unit and opted to stay out of the auction."
Emergency Federal Reserve meeting, via WSJ:
"The Federal Reserve Bank of New York held an emergency meeting Friday night with top Wall Street executives to discuss the future of venerable firm Lehman Brothers Holdings Inc. and the parlous state of U.S. financial markets.
In attendance were New York Fed President Timothy Geithner, Treasury Secretary Henry Paulson, Securities and Exchange Commission Chairman Christopher Cox, Morgan Stanley Chief Executive John Mack and Merrill Lynch Chief Executive John Thain, among others."
Note that at this point there is the faint air of LTCM about the room. (Ahem). WSJ continues:
"The meeting began at 6 p.m. but precise details about what was discussed could not be learned. The meeting appeared similar to one a decade ago when the New York Fed pulled together top Wall Street executives to prevent the collapse of hedge fund Long-Term Capital Management.
One big issue: Most of the firms at the meeting have themselves been hit with big losses and may not have the excess capital to step in. (talk about understatement)
"Senior representatives of major financial institutions met at the Federal Reserve Bank of New York Friday evening to discuss recent market conditions," a spokesman for the New York Fed said.
The future of Lehman could open a new chapter in the government’s handling of the financial crisis, which is sweeping up an increasing number of firms, including American International Group Inc. and Washington Mutual."
I assume the crew won’t waste a bailout announcement on a Friday eve or Saturday, as there are no markets on the planet that are open 9at least none that matter).
Our new national slogan is: If its Sunday, it must be bailout.
Disclosure: Short AIG
Lehman Investment Unit Gets Bids From Bain, Clayton
By Jason Kelly and Jonathan Keehner
Bloomberg, Sept. 12 2008
New York Fed Holds Emergency Meeting On Lehman’s Future
DAMIAN PALETTA and SUSANNE CRAIG
WSJ, September 12, 2008 9:10 p.m.
It ain’t just Lehman, Fannie and Freddie: There are plenty of other Pigs in the sea. > Washington Mutual (WM) We are long this — my trading desk has been trying to bottom tick this today — but I don’t like it as anything other than a trade. > American International Group (AIG) We are…Read More
Ackman on the GSE Bailout
click for video
Wed. Sept. 10 2008 | 8:06 AM[12:29]
Perspectives on Lehman, Fannie & Freddie, with Bill Ackman, Pershing Square Capital Management managing principal
click for video
Wed. Sept. 10 2008 | 8:35 AM[05:06]
Discussing the ensuing financial crisis and the risk of global recession, with Bill Ackman, Pershing Square Capital Management; Nouriel Roub…
click for video
Wed. Sept. 10 2008 | 8:57 AM[02:23]
Final thoughts, with Bill Ackman, Pershing Sqare Capital Management and Nouriel Roubini, RGEMonitor.com