Bloomberg News

Barclays, BofA Said to Consider Selling Stakes in Archstone

October 03, 2011

Oct. 3 (Bloomberg) -- Barclays Plc and Bank of America Corp. may sell their shares of apartment company Archstone after failing to reach an agreement with Lehman Brothers Holdings Inc. to liquidate the entire business, said two people with knowledge of the banks’ plans.

Barclays and Bank of America together own 53 percent of Archstone, the apartment-complex owner acquired in a $22 billion leveraged buyout in 2007 led by Lehman, said the people, who declined to be identified because the talks are private. The combined stakes are valued at between $2 billion and $3 billion, said one of the people. The Wall Street Journal reported the banks’ plans yesterday.

The two banks and Lehman, which filed the biggest bankruptcy in history three years ago, couldn’t agree on selling the entire company, which has ownership interests in hundreds of apartment developments from Washington and New York to Los Angeles and San Francisco, because Lehman prefers to hold the assets until a public offering, the people said.

Lenders are looking to sell assets such as Bank of America’s $800 million U.S. Pizza Hut franchisee to bolster capital ahead of stricter internatonal rules on capital. Blackstone Group LP, Brookfield Asset Management Inc., Equity Residential and AvalonBay Communities Inc. are among the companies that have made unsucessful bids for parts or all of Archstone, one of the people said.

Lehman, Barclays and Bank of America provided financing for the 2007 deal and can’t sell the entire busines unless all three agree, said one of the people. Archstone could be sold for between $16 billion and $18 billion, according to the person.

Kerrie McHugh, of Bank of America, Brandon Ashcraft of Barclays Capital, Kimberly Macleod of Lehman and Peter Jakel of Archstone said they couldn’t comment on plans to sell the business.

Top Stories: TOP <GO> For Bloomberg’s Commercial Real Estate Overview: CRE BN <GO> Top real estate stories: TOPR <GO>

--Editors: William Ahearn, Steve Dickson

To contact the reporters on this story: Charles Mead in New York at cmead11@bloomberg.net; Hugh Son in New York at hson1@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net


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