Lehman Brothers Holdings Inc. struck a deal last week to purchase a 26.5 percent stake in apartment company Archstone for $1.58 billion, as was first reported last week by The Wall Street Journal.
Lehman will buy the stake from Bank of America Corp. PLC, which in 2007 teamed up with Lehman to purchase Archstone through a leverage buyout at an estimated $22 billion.
Lehman and Equity Residential, the Chicago-based apartment building owner that’s headed by the flamboyant Sam Zell, had been in a tense fight when Equity tried to purchase a stake in Archstone. Lehman originally had a 47 percent stake in Archstone, the remainder of which was owned by two banks. Lehman blanched at the idea of sharing control of Archstone with Equity Residential, although Mr. Zell had made his own bid for $1.33 billion.
Lehman matched his bid, giving Lehman 73.5 percent control of Archstone, while the banks received the remaining 26.5 percent.
Equity Residential will still receive $150 million from the deal, which includes an $80 million “breakup fee”, as was reported by The WSJ.
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