Private equity firms eye Lehman unit

New York: Lehman Brothers Holdings Inc. received bids for its asset-management unit from private-equity firms including Bain Capital and Clayton Dubilier and Rice, said people familiar with the situation.

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 (Dh18.35 billion), said the people, who asked not to be named because the auction is private. KKR, which was weighing an offer, hadn't made a bid by the 5 pm deadline, the buyout firm told people involved in the process.

Lehman said on September 10 it would sell 55 per cent 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 per cent 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.

"It's still going to be a premier property," said Eric Weber, a managing director of Freeman & Co., a New York-based financial-services consulting firm.

"Three years from now, you can take it public if you can get your hands on it."

Hellman & Friedman LLC, the San Francisco-based buyout firm started by Warren Hellman, may also have submitted a bid, according to the people. Representatives for Lehman and the private-equity firms declined to comment.

The buyout companies are angling to own a business with assets of $273 billion headed by former Goldman Sachs Group Inc. banker George Walker, 39. The New York-based firm proceeded with the auction because the private-equity firms continued to express interest in a deal, according to the people.