Potential buyers of Neuberger Berman
have until noon today to get their bids in on the asset manager. Those bids may not have to be quite as high, thanks to falling stock prices.
Last week, Carlyle Group
, a potential bidder for Nueberger, filed papers with the bankruptcy court that pointed out the provision could lower the initial bid by Bain Capital LLC
and Hellman & Friedman LLC
to just $900 million.
Bain-Hellman had bid $2.15 billion on September 29 to purchase the asset manager and mutual fund firm from Lehman. However, that bid was tied to the value of the Standard & Poor’s 500 Index remaining above 902 for the 10 trading days prior to the close, according to reports.
The index opens at 896.24 this morning. During the previous 10 days it has averaged 844. When the deal was signed on October 3 the index was 1099.
U.S. Bankruptcy Judge James Peck in New York's Southern District is accepting bids on Neuberger until noon today. He has set December 22 as the date for the hearing to approve the sale to the winning bidder. Bids must be at least $25 million more in value than the existing Bain-Hellman offer.
Bain-Hellman has the option to waive the provision tying its bid to the value of the S&P 500 closing values. It would presumably do so if its bid is below that of a rival in the auction. If there are no other bidders, Bain-Hellman would be positioned to walk away with Neuberger at the revised, low price.
However, Carlyle is reportedly the primary financial backer of a bid led by Jeffrey Lane
, Neuberger's former top executive. Silver Lake Partners may also be preparing a bid, according to a published report.
Lehman purchased Neuberger for $3.2 billion in 2003.
Sean Hanna, Editor in Chief
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