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Barclays May Make A Play For Lehman

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The Associated Press

Published: September 17, 2008

NEW YORK - Barclays PLC will unveil a plan to acquire all or part of Lehman Brothers Holdings Inc.'s investment banking and trading operations, a person close to the talks said Tuesday.

The deal could throw a lifeline to more than 9,000 Lehman employees whose future was uncertain after Lehman filed for bankruptcy protection Monday. Lehman collapsed from massive exposure to risky real estate holdings.

Barclays President Robert Diamond has addressed Lehman investment bankers to inform them of his company's intentions, this person said. He spoke on condition of anonymity because a final agreement had yet to be reached.

The third-biggest British bank had withdrawn from weekend talks with Lehman Brothers about a possible outright acquisition. There have been reports that Barclays can pick up the assets it wants for about $2 billion to $3 billion.

The deal must get approval from the bankruptcy court.

A Lehman Brothers request to get initial approval of asset sales from a bankruptcy judge was postponed by one day to a hearing scheduled for today.

The delay was announced Tuesday ahead of the company's first hearing in its bankruptcy case. A request to obtain loans to operate while in bankruptcy was also postponed.

A court official did not specify the reason for the delay. The Tuesday agenda had included a motion to start the process of selling certain assets.

The hearing was held at the U.S. Bankruptcy Court in the Southern District of New York, before Judge James Peck.

Also on Tuesday, the House Oversight and Government Reform committee said it would hold a hearing Sept. 25 to examine the "regulatory mistakes and financial excesses" that led to Lehman's bankruptcy filing. It asked Lehman Chief Executive Officer Richard Fuld to testify before the committee.

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