A management buy-out of Lehman Brothers’ US based investment management division was yesterday given the green light by the bankruptcy court.
US Bankruptcy Judge James Peck approved the deal which will see the management team, led by Lehman’s global head of investment management George Walker, take a 51% stake in the company.
Lehman Brothers will retain a 49% stake in the new company, which will be called Neuberger Investment Management.
The business will include Lehman’s property investment and private equity divisions, as well as Neuberger Berman asset management business, which managed $160bn (£108bn) of assets.
Private equity firms Bain Capital and Hellman & Friedman had bid for the business in a deal estimated to be worth $745m (£503m).
It is understood the MBO bid will be worth around $922m (£622m).
The deal will give Lehman Brothers creditors a 93% stake in separate preferred-issue stock valued at $875m (£590m).
Creditors would be expected to sell the stock when the market improves.
The management team was selected as the winning bidder in a Bankruptcy Court auction earlier this month. The deal is expected to complete in the first quarter of next year.
Walker will be chief executive of the new company.
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