Barclays in talks with Lehman Brothers

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The Independent Online

Barclays today is in talks over buying up some parts of the collapsed Lehman Brothers empire.

The UK high street bank, which walked away from a wider rescue deal for Lehman over the weekend, said it was discussing "the possible acquisition of certain Lehman Brothers assets on terms that would be attractive to Barclays shareholders."

It is understood the talks are currently focusing on "clean" parts of Lehman's US operations, such as core investment banking infrastructure and staff, and none of the group's so-called "toxic" mortgage-related assets that fuelled its downfall.

Barclays said: "There can be no assurance that the discussions will result in an agreement. A further announcement will be made in due course."

The comment followed reports in the Wall Street Journal that the high street bank was looking to take over Lehman Brothers' core business - comprising share and bond underwriting, merger advice and securities trading.

Barclays was not expected to take on the firm's foreign operations in Europe and Asia, which have been growing in recent years, the Journal said.

Lehman Brothers US parent filed for bankruptcy protection yesterday, with the UK main trading operation also going into administration.

The US arrangement allowed the group to pursue to sale of its broker-dealer operations, as well as its investment management division. Another subsidiary, Lehman Brothers Asset Management, was also not subject to the bankruptcy petition.

It was a similar story in the UK, where a number of business areas were not part of the administration process, including Lehman Brothers' asset management and corporate finance business.

Barclays reportedly walked away from a Lehman rescue deal after failing to obtain guarantees over the bank's financial commitments.

It considered a merger but decided it "was not in the best interests of shareholders".

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