It's Official: Lehman Procures Neuberger

July 22, 2003 ( - After working overtime in recent weeks, the rumor mill can take break: Lehman Brothers and Neuberger Berman have announced a $2.6 billion cash and stock purchase.

Under the terms of the agreement, each Neuberger Berman shareholder would receive an implied price of $41.48 per share consisting of $9.49 in cash and 0.496 shares of Lehman Brothers common stock. The offer represents a 2.5% premium to the close of Neuberger’s shares on Monday, after the stock tumbled 2.3% to $40.44, according to a news release issued by Lehman.

Lehman, which also stated both boards have rubber stamped the deal, is definitely giddy about the implications the merger has in the firm’s quest to diversify away from a reliance on its traditional bond and underwriting businesses – something the company has been criticized for relying too heavily on.   For its part, Lehman said the potential merger would significantly increase its high margin high net worth and asset management businesses.

Neuberger Berman, a New York money management firm with approximately $56.3 billion under management, provides clients with a range of investment products, services and strategies including private asset management, wealth management, tax planning, personal trust services, mutual funds and professional securities services.   The firm made headlines last December for its coup in building a new Growth Equity Group by hiring away a team of portfolio managers from Northern Trust (See  Neuberger Berman Lures Away Northern Trust Equity Unit ).  Then in April, the Hartford Group unveiled a new program in conjunction with Neuberger Berman, where the asset manager would take on the role of an investment advice fiduciary in assisting plan sponsors in researching, selecting and monitoring of plan investments (See  Hartford Taps Asset Manager for Advisory Service ).