Analyst Richard Bove has stated Lehman CEO Richard Fuld has "lost control of the game." That is something I completely agree with as it should be obvious to all. Bove went on to say "If he doesn't do something this weekend, as of next week, the game is on." That makes absolutely no sense. Nor does Bove's price target of $20 per share.



Yes, Lehman has been shopping around for buyers, but buyers have been balking. I talked about Lehman talks collapsing and how poorly Lehman's preferreds trade in Ten Financial Entities On The Brink.



Lehman's Crown Jewel For Sale



Five days ago in a will he, won't he debate Financial News reported Lehman Brothers to keep Neuberger Berman unit.



Lehman Brothers is not looking to sell Neuberger Berman, an asset management business, according to analysts who met with Herbert McDade, the bank's new president and chief operating officer.



So much for that idea.



CNBC is reporting Lehman May Have Trouble Selling Neuberger Stake.



The same way sovereign funds balked over Lehman Brothers CEO Dick Fuld's terms to sell them a chunk of the firm, some private equity firms are balking over Fuld's terms to sell them a part of Lehman's investment management business, which includes the firm's crown jewel, the Neuberger & Berman asset management unit, sources have told CNBC.



As first reported by CNBC, Fuld, Lehman's long-time chief executive, is looking to sell a 70 percent stake in the investment management division and have an option to buy it back at a later date. As a carrot to the potential buyer is a warrant to purchase a 20 percent stake in Lehman that could be cashed in when the credit crisis abates and the firm's stock price recovers.



But potential buyers—which include nearly every major private equity firm—are starting to balk at Lehman's initial offer, according to Wall Street executives familiar with the matter.



Their problem is the price. Lehman is pricing the investment management division at around $10 billion, meaning a 70 percent stake would cost $7 billion. But the real cost will be much more than that, because asset management firms are only worth something if employees remain with them following such a transaction. Potential bidders believe that unless they set up a large retention pool—something in the neighborhood of $400 million to $500 million to keep employees at their jobs—the talent will walk, these people say.



Meanwhile, many of the firm retail brokers, who are part of the firm's investment management division, have been offered jobs by the likes of Morgan Stanley, plus bonuses to jump ship. Without a retention package, many might just leave Lehman, particularly as the firm's prospects grow dimmer.

Fuld Wants His Cake And Eat It Too

Korea Back In The Game

Aug. 22 (Bloomberg) -- Lehman Brothers Holdings Inc., the fourth-largest U.S. securities firm, rose the most in two weeks in New York trading after Korea Development Bank said it's "considering" an investment in the company.



Lehman climbed $1.44 to $15.16 at 11:43 a.m. in New York Stock Exchange composite trading, after reaching $15.93. Shares of the New York-based firm dropped almost 80 percent this year before today, the worst-performer on the 11-company Amex Securities Broker/Dealer Index.



"KDB is considering all kinds of options, including Lehman Brothers," a KDB spokesman said today, declining to elaborate. A Reuters report earlier today cited a spokesman saying that the government-controlled bank is "open to" possibilities, including a purchase of Lehman.



"I would be very surprised by any deal that would lead to complete control," said Stuart Eizenstat, a partner at Covington & Burling LLP in Washington and former U.S. Deputy Secretary of the Treasury. "That would elicit a lot of questions and political blowback. I'm sure that's not going to happen."

Is This Good News?