Phew. A spokesman for Korea Development Bank says the state-run lender is open to buying Lehman Brothers (LEH). So that’s finally one possible taker. Of course, the next question is price. Reuters:
The Chosun Ilbo daily cited government and industry sources as saying that Lehman had first contacted Korea Investment Corp (KIC), a sovereign wealth fund, among South Korean investors as part of a fund-raising drive.
But after the KIC decided not to invest in Lehman, the Wall Street bank contacted KDB, whose CEO had led local operations of Lehman for three years until early this year.
Lehman executives were not available for comment. Buying Lehman wouldn’t be any kind of a financial challenge for the well-capitalised bank. But a prospective takeover would probably be hampered by regulators:
“Financially, KDB will not have a problem buying a majority stake in Lehman, as the U.S. bank’s market cap has fallen sharply over the months,” said Park Jung-hyun, an analyst at Hanwha Securities in Seoul.
“The problems, however, are legal and regulatory issues. I am not so sure if the U.S. government will easily allow a foreign bank to purchase a significant stake in one of its key financial institutions.”
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