Lehman Looks Hard At Taking Firm Private

Discussion in 'Wall St. News' started by THE-BEAKER, Jul 15, 2008.

  1. Lehman Brothers' CEO Dick Fuld is seriously mulling a way to take itself private and out of the public eye, The Post has learned.

    According to sources, talks internally centering on privatizing Lehman have gotten very serious consideration after a blistering onslaught of rumors and questions about the firm's solvency have caused the venerable bond shop to shed more than 79 percent this year.

    Details on how such a take-private maneuver might work are not clear. However, the rationale is that the free-fall in Lehman's shares, which tumbled as much as 15 percent yesterday, is attracting hungry vultures hoping to snap up the ailing fixed-income shop on the cheap. "The idea is why sell to someone else at so cheap a price when they could buy themselves," noted one source.

    Lehman's shares tumbled again after sinking 37 percent last week along with embattled mortgage giants Fannie Mae and Freddie Mac. Its shares closed at $12.40 yesterday down $2.03. Lehman's employees already own 30 percent of the outstanding stock.

    Yesterday, Fox-Pitt bank analyst David Trone, issued a report suggesting Lehman go private at a 25 percent premium to its stock price in order to stem the bleeding its incurred of late.

    Lehman declined comment.

  2. Once the stock trades at $0.50 they might be able to afford it.
  3. lol yeh I would like to see them trying to raise debt to go private in this environment, it's not happening. Not to mention they are now paying most of their employees in stock, don't know how that would work if they went private.
  4. Good point. It may be in the best interests of LEH employyes to sell their holdings while they still can.
  5. They could sell call options on their own stock and buy themselves out with the premium.
  6. if bear stearns went under on short selling, rumours and visible problems on the balance sheet??

    then remove the public eye.

    private company means no visible level 3 assets and values.

    no short sellers.

    no rumours.

    etc etc.

    not a bad plan really.

    can they pull it off?
  7. Fuld will do anything to hold on to his "funny money" bonuses......

    Yeah, keep it legal......
  8. Fed will probably lend them money to go private haha is that possible?
  9. Artist's interpretation of Lehman's balance sheet

    #10     Jul 15, 2008