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Monday 08th of December 2008
September 16, 2008

Barclays confirms interest in possible acquisition of Lehman Brothers assets

by Kay Murchie

Yesterday saw the collapse of Wall Street giant, Lehman Brothers, which was forced to file for bankruptcy after announcing it had failed to find a solution to its problems after a weekend of rescue talks with Barclays and Bank of America.

However, Barclays has confirmed it could now be interest in buying parts of the stricken business.

In a statement to the Stock Exchange, the British bank said it is discussing with Lehman Brothers the possible acquisition of certain Lehman Brothers assets on terms that would be attractive to Barclays shareholders.

According to a BBC report, Barclays would not be interest in Lehman’s ‘toxic investments in the residential and commercial property markets’.

Lehman has a global workforce of 25,000 but it is not clear as to whether the talks include the London business in Canary Wharf, which saw 4,000 people clear their desks and lose their jobs yesterday.

It is believed that Bob Diamond, Barclays president and head of investment banking arm Barclays Capital, is leading the discussions.

The news appeared to be welcomed on the Stock Exchange after shares in Barclays did not fall as heavily as its rivals.

Shares in Halifax banking group, HBOS, lost 30% at one point today, following its fall of 18% yesterday, while RBS closed down 10.2% at 189.1p

Should Barclays proceed, it is understood that the bank would have to act quickly.

However, a spokesperson for Barclays said there can be no assurance that the discussions will result in an agreement. A further announcement will be made shortly, the spokesperson added.

Last month, Barclays posted a 33% fall in pre-tax profits for the first six months due to credit crunch related write-downs.

In related news, there are fears for the future of insurance giant, AIG. Credit ratings agencies Moody’s and Standard & Poor’s downgraded ratings on AIG debt.

The insurer was granted a $20 billion lifeline yesterday after being told by New York Governor, David Paterson, that it could borrow the money from AIG subsidiaries.

The insurer has posted three consecutive quarterly losses totalling $18.5 billion (£10.3 billion).

AIG is renowned in the UK as the sponsor of premiership football team, Manchester United, and is the biggest shirt sponsorship in English football.

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