Compelo Banking is using cookies

We use them to give you the best experience. If you continue using our website, we'll assume that you are happy to receive all cookies on this website.

ContinueLearn More
Close
Dismiss

Lehman to dispose of Archstone to Equity Residential, AvalonBay for $6.5bn

US based Lehman Brothers Holdings (LBHI) has agreed to sell complete ownership of its single largest asset, Archstone Enterprise, to Equity Residential (EQR) and AvalonBay Communities (AVB) for nearly $6.5bn in a cash and stock transaction.

As per the terms of agreement, 60% and 40% of Archstone’s assets and liabilities will be purchased by EQR and AVB respectively.

On completion of the deal, Lehman and its affiliate, Lehman Commercial Paper, will receive $2.7bn in cash and 34,468,085 and 14,889,706 shares of Equity and AvalonBay common stock, which is valued at $3.8bn.

LBHI and its affiliates will now own 9.8% of EQR and 13.2% of AVB based on the shares of each issued as consideration.

The deal is not subject to shareholder approval of the acquires and is expected to close within a time period of 120 days.

Lehman Brothers, which went bankrupt in 2008, has emerged from bankruptcy protection in March this year and is disposing of its assets to pay back $65bn to its creditors, as part of a wind-down plan approved by a bankruptcy court.

In the aforesaid deal, Gleacher & Co, Citigroup and JP Morgan Chase provided advice to Lehman, while Morgan Stanley served for Equity Residential and Greenhill & Co, for AvalonBay.