It seems all that excitement was for naught. Lehman has crossed oceans looking for capital, and now even Korea won’t give it to them.
The Korean Development Bank has walked away from a deal with Lehman Brothers after South Korean officials questioned the intelligence of investing in the troubled bank. Lehman’s stock is down 28%. So we guess that means Lehman will have to sell its asset-management unit Neuberger.
WSJ: The prospect that South Korea’s government-owned Korea Development Bank will invest in Lehman Brothers Holdings grew dimmer Tuesday as regulators said talks between the two parties have ended.
The two companies have talked off and on over the past two months about a possible investment by Korea Development, known as KDB, in Lehman, which is burdened by mortgage debt that soured in the U.S. housing crisis.
After expressing support for KDB’s expansion strategy in July, South Korean regulators, led by Financial Services Commission chairman Jun Kwang-woo, turned more cautious in August as more details about Lehman’s condition became known.
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