The sale of the Neuberger asset management arm of Lehman might have been agreed back in September, but it’s not quite a done deal. 
The whole process has been rather messy — Lehman put a majority percentage of the prized asset management arm up for sale in August, prior to filing for bankruptcy.  
The unit, one of Lehman’s best performing assets, drew interest from a number of private equity bidders such as Kohlberg Kravis Roberts, Hellman & Friedman, Blackstone, Bain Capital and Clayton Dubilier & Rice, sources previously said.  
Some estimates valued the unit between $8 billion and $10 billion. 
After its September bankruptcy filing, the whole of the asset was marketed. Bidders were whittled down to the winning team of Bain Capital LLC and Hellman & Friedman LLC who clinched the deal for $2.15 billion. 
Typically, that would have been the end of it — but because the sale was being done after Lehman filed for bankruptcy, an auction is to take place and could draw counter bids. The 45-day clock for the auction started ticking in October and stops at noon on Monday. 
The most likely potential bid could come from Carlyle Group [CYL.UL], which together with former Neuberger Berman Chief Executive Jeffrey Lane, in October filed an objection to the sale of Neuberger and said in court it would itself be interested bidding, but believed that Bain and H&F had an unfair advantage.

A source familiar with the matter previously told Reuters that Carlyle was expected to bid.
Lane, according to the Wall Street Journal, is a Wall Street veteran who joined Neuberger in 1998, saw the firm through its 1999 IPO and $2.6 billion sale to Lehman Brothers in 2003. After serving as a vice chairman of Lehman, Bear Stearns hired Mr. Lane in 2007 to try and shore up its asset-management unit after two of its hedge funds collapsed, the WSJ said. After Bear itself imploded, Mr. Lane became chief executive of private bank Modern Bank, it said. 
Carlyle and Lane claimed the price paid for Neuberger was too low and violated Lehman’s obligation to maximize the value of its asset sales to pay off creditors, in an objection filed in the U.S. Bankruptcy Court for the Southern District of New York. 

It goes against so-called Hornbook Law, the most basic, elementary law of all.

“This is patently contrary to hornbook law that a debtor which sells assets in a chapter 11 case has an obligation to seek the highest and best values for the benefit of its estate,” the objection said. 
Other bidders could also come out of the woodwork. Silverlake has been one name mentioned by sources as having shown interest in the past. 
The sale of Neuberger next week could be interesting if there’s a fight for the asset, with an auction set for court on Wednesday. 
These are the deadlines the bankruptcy court has set:  
  
    The deadline to submit a Qualified Bid (as defined in the Bidding Procedures) is December 1, 2008 at 12:00 noon (New York time).
    An auction has been scheduled for December 3, 2008 at 10:00 a.m. (New York time).
    The deadline to lodge an objection with the Bankruptcy Court to the proposed sale is December 17, 2008 at 4:00 p.m. (New York time). Objections must be filed and served in accordance with the Bid Procedures Order. 
    The Bankruptcy Court will conduct a hearing to consider the proposed sale on December 22, 2008 at 10:00 a.m. (New York time).

LandAmerica’s experience is the latest example of how dismal the M&A market has become in financial services as potential suitors worry about buying someone else’s troubles.

The title insurer, weakened by the U.S. housing slump, started its search for a buyer some two months ago.

But despite hiring JPMorgan and Wachtell Lipton, setting up a data room and approaching a range of potential suitors – a large shareholder, rivals and private equity firms – it could not survive.

The unidentified shareholder, whom the company initially approached for a capital injection or acquisition, was uncomfortable with its potential liquidity needs.

Fidelity National ultimately emerged as the only suitor able to complete a deal quickly and a merger agreement was announced on Nov. 7. But within two weeks Fidelity wanted to back out as well.

Fidelity reached a new deal to buy the insurer’s largest underwriting businesses, while LandAmerica filed for Chapter 11 bankruptcy protection.

Fidelity agreed to pay a combined $298 million for the units. It had agreed to buy all of the company for about $126 million in stock earlier this month.

(Photo credit: Robert Galbraith, Reuters)

A day after mining giant BHP Billiton dropped its bid for rival Rio Tinto, Rio said it was confident it could sell assets worth billions of dollars. Analysts aren’t convinced.

As the credit crisis dries up available funds, some companies are backing away from buying anything.

“The environment over the next six to 12 months is not going to be a good environment for selling assets,” said FW Holst analyst Rob Craigie.

Despite the skeptics, Rio Chairman Paul Skinner, speaking at a scheduled business breakfast, said it would make asset sales in the next few months.

“We now move on. We have a very strong company,” Skinner told reporters. “We are confident with our financial position. We have other ways of managing our debt.”

Assets on the block include a major packaging business, aluminum products, its U.S. coal business, an Australian copper mine and its U.S. Sweetwater uranium mine.

(Note from Editor: Given the Thanksgiving Day holiday this week, today’s posting will be the last for this week. Expect us back as usual on Monday.)

More Deals of the Day:

** Goldman Sachs has broken off talks with Panasonic Corp for now on selling its stake in Sanyo Electric after the electronics maker made an offer below Sanyo’s current stock price.

** India’s Sun Pharmaceutical Industries Ltd said its unit had acquired 100 percent of U.S.-based narcotic producer and importer Chattem Chemicals Inc for an undisclosed sum.

** QBE Insurance Group Ltd, Australia’s top insurer by premium income, will buy U.S.-based underwriting agency ZC Sterling Corp for $575 million, part funded by a $1.3 billion equity raising, and has upped its 2008 revenue growth target.

** Bahrain-based retail lender Bank of Bahrain and Kuwait is considering merging its newly-launched Islamic bank with peer Shamil Bank or another bank, its chief executive said in remarks published in Al Watan newspaper.

** U.S. private equity group KKR is planning a bid for Abengoa’s Nasdaq-listed technology unit Telvent GIT, Expansion reported citing sources familiar with the deal.

** Trading in shares of Woolworths Group Plc, the struggling sweets-to-DVDs retailer, were suspended, while talks continued to save the business from collapse. The 99-year-old group confirmed it remains in talks regarding the potential sale of its 800-store retail business to restructuring specialist Hilco UK for a nominal sum.

** Mobile telecoms equipment provider Ericsson and chipmaker STMicroelectronics won permission from EU competition authorities to combine their wireless chip and software businesses.

** Hungary’s OTP has been looking at possible foreign acquisitions in recent months but is not likely to make any purchases until the global financial crisis is over, Chief Financial Officer Laszlo Urban said.

** Spain will fight to keep oil major Repsol YPF Spanish and independent in the face of possible stakebuilding from Russia’s LUKOIL, Prime Minister Jose Luis Rodriguez Zapatero said.

** Colonial has granted buy options on its 15.45 percent stake in Spanish builder FCC and its 33 percent of French unit SFL to its creditor banks, the property developer said.

** Porsche SE will not pay “ridiculous” prices for VW shares amid recessionary conditions, it said, backing away from its previous target to take majority control of Europe’s biggest carmaker by the end of the year.