Lehman Brothers to acquire remaining Archstone stake

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Lehman Brothers Holdings is to buy the remaining 26.5% stake in the real estate group Archstone for US$1.6bn from Barclays and Bank of America.

A deal announcement is expected soon which will clear a path towards a potential flotation of Archstone.

Lehman acquired Archstone with Barclays and Bank of America in 2007 for US$22bn. Lehman filed for bankruptcy in 2008 and emerged from it earlier this year.

Bank of America and Barclays last year agreed to sell about half of their stakes in Archstone, or 26.5%, to Equity Residential for US$1.3bn. Lehman, however, exercised its first refusal over the stake, and subsequently exercised another right to buy the remaining 26.5% stake in Archstone.

Lehman is to pay a break fee of US$80m plus an additional US$70m to Equity Residential.

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