Japan's Nomura Holdings and other financial firms were battling today to snap up the Asian and European operations of collapsed US investment bank Lehman Brothers.
Nomura, Japan's largest brokerage, has bid for both, two financial industry sources said, while South Korea's Samsung Securities is eyeing Lehman's Asian operations.
A source with knowledge of the matter said that Standard Chartered was also interested in Lehman's Asian assets, and the Financial Times added China's CITIC Securities to those circling the assets.
Barclays, which agreed last week to buy Lehman's core business in North American investment banking and capital markets businesses for $1.75 billion, was reported in weekend media to be keen to also buy parts of Lehman's European equities and equity capital markets businesses.
Lehman, once the fourth-biggest US investment bank, last week filed the largest ever US bankruptcy case after collapsing from exposure to risky securities backed by subprime mortgages.
Lehman's net revenue from Asia-Pacific in January-June was $1.4 billion, nearly matching the whole of 2006 and accounting for roughly 20 per cent of the bank's overall revenues.
Nomura executives visited Hong Kong over the weekend to propose buying Lehman's flagship stockbroking and investment banking divisions in Asia, according to the sources, who asked not to be identified as the information is not public.
"Nomura's proposals are the most competitive and put it in the leading position," one of the sources said.
A source close to the matter said separately that Samsung Securities officials were also in Hong Kong over the weekend to discuss investing in Lehman's Asian operations.
Lehman has around 3,000 employees in Asia in 10 offices, with roughly 1,300 in Tokyo and 800 in Hong Kong.
The Tokyo office has a large fixed income group, while Hong Kong mainly houses M&A, equity capital and debt capital bankers. In Singapore, Lehman employs 250, mostly focused on commodities and trading.
Lehman ranks second behind JPMorgan in year to date M&A rankings in Asia ex Japan, with 15 deals worth a total $32 billion, according to Thomson Reuters.
Shares in Nomura, regarded as a domestic powerhouse, rose 8 per cent in Tokyo today, and CITIC jumped 10 per cent in Shanghai. In Seoul, Samsung Securities added 1 per cent, outperforming a 0.6 per cent gain on the broader index
On Sunday, more than 100 angry Hong Kong investors, many of them elderly retirees, marched on government offices, calling for action after losing money on structured products linked to Lehman. They accused the government and local banks of failing to warn them of the risks involved.
PricewaterhouseCoopers is acting as administrator for Lehman's European business, and is expected to move quickly as delays would cause Lehman to lose customers and staff.
British prime minister Gordon Brown said on Saturday he was pushing the United States to help get $8 billion from Lehman to its staff in Britain.
Administrators winding up Lehman's European business have questioned why that amount was transferred to New York just before the bank collapsed. There have been fears among Lehman's 4,500 staff in London they may not get their final pay packets.
Reuters