Seeking Alpha

Lehman's (LEHMQ.PK) bankruptcy estate is preparing to match Equity Residential's (EQR) $1.33B...

Lehman's (LEHMQ.PK) bankruptcy estate is preparing to match Equity Residential's (EQR) $1.33B bid to buy 26.5% of Archstone from BofA (BAC) and Barclays (BCS), the WSJ reports. Equity and Lehman want to gain control of all of the appartment company, with the latter already owning 47% and looking to eventually take it public.
Comments (3)
  • bill d
    , contributor
    Comments (1879) | Send Message
     
    Be a nice present for me.
    11 Dec 2011, 11:50 AM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
     
    Sam Zell is no pushover though.

     

    He's got Bank of America, and Barclays in his pocket.

     

    The obvious negative as stated by WSJ, is all owners of Archstone have to agree on most major decisions even if they hold a minority stake. They will of course prepare the standard "dog & pony show" for investors, billing it as the "big comeback". I wouldn't drink that kool-aid so fast. As far as the Courts are concerned bankruptcy estates should be offing assets, explain that one to Creditors when they go bust again.

     

    Last week, the wind-down plan was approved, and calls for a $65 billion payout to Lehman creditors, or roughly 18 cents on average for every dollar they are owed. Now, they (Lehman) want to turn around and spend more on a 50/50 investment?

     

    This deal is problematic, as Archstone is one of the main reasons Lehman went face down. The investors who remember this, will be able to identify it by smell. Zell's Equity Residential, (EQR) is far better suited for this transaction, with mega financing from majors, at his beck and call, ensuring a smooth transition and eventual IPO.

     

    Although, with Lehman's track record, it could be a ploy by Zell to push Lehman into a do or die situation. If the market tanks again in Spring 2012, (more than likely), Zell could pick up the distressed portfolio at an even cheaper price. Smart guy either way.
    12 Dec 2011, 02:06 AM Reply Like
  • bill d
    , contributor
    Comments (1879) | Send Message
     
    Yes - except I don't own 1000 EQR :o(
    12 Dec 2011, 12:02 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|