Even Lehman's Neuberger Sale Could Be Scuttled by Declining Market

Even Neuberger Berman, once said to be the crown jewel among Lehman Brothers’ (LEHMQ.PK) assets, isn’t turning out to worth nearly as much as once supposed. You can thank—surprise!—the decline in the stock market:

Lehman Brothers Holdings Inc. may not get to close a $2.15 billion sale of its investment- management business to Bain Capital LLC and Hellman & Friedman LLC as a result of a provision tying the deal’s completion to the value of the Standard & Poor’s 500 Index.

The purchase by Bain and Hellman of the division, which includes the Neuberger Berman unit, is conditioned on an S&P 500 average closing price of more than 902 for the 10 trading days before the sale closes. The average for the last 10 days has been about 844, after the index reached its 52-week intraday low of 741.02 on Nov. 21. When the parties signed the deal Oct. 3, the S&P closed at 1099.23.

A very unhappy comedown. Just a few months ago, analysts said Neuberger could be worth anywhere from $6.5 billion to $13 billion to Lehman in a sale. Eventual post-Lehman-bankruptcy sale price, to Bain and Hellman & Friedman: $2.15 billion. Possible final sale price, says Carlyle Group, the runner-up in the bidding, could be just $900 million. . .