NEW YORK — Its future in jeopardy and options dwindling, Lehman Brothers scoured Wall Street Thursday for a financial lifeline. Top executives contacted banks and rival investment houses about a possible deal to buy the company, bankers and industry executives close to the situation said.
The nation’s fourth-largest investment bank, which had tenaciously resisted putting itself up for sale, finally relented after a free fall in its stock price and growing doubts about whether other financial institutions would continue to do business with it, according to these officials. They asked not to be named because they are not authorized to comment publicly.
The Washington Post reported late Thursday that the Treasury Department and the Federal Reserve are arranging a sale through a consortium of private firms. It said the deal has not been finalized but quoted unnamed sources as saying it could be announced this weekend.
Government officials who asked for anonymity because of the sensitivity of the ongoing discussions cautioned that a number of options were still being explored and that no decisions had been reached on how any deal to rescue Lehman would be structured.
Lehman spokesman Randy Whitestone declined comment.
Bank of America, Japan’s Nomura Securities, France’s BNP Paribas, Deutsche Bank and Britain’s Barclay’s also have been mentioned this week as potential buyers. Goldman Sachs Group, which also was being talked about as a potential buyer, is not interested, according to an industry official who asked not to be named.
Lehman’s losses soared to almost $7 billion in the past two quarters alone, primarily because of wrong-way bets on mortgage securities and other risky investments.
It’s not alone. Global banks have lost more than $300 billion since the subprime mortgage crisis spread to the credit markets one year ago. And the International Monetary Fund has suggested total losses globally could hit $1 trillion.
Lehman chief executive Richard Fuld tried to assuage nervous investors on Wednesday by announcing a plan to sell a 55 percent stake in its prized investment management business and spin off its commercial real estate holdings into a publicly traded company.
