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Lehman Brothers Holdings Inc.'s bankruptcy estate has reached a deal to acquire a larger percentage in apartment-building owner Archstone for $1.58 billion. The deal calls for Lehman to buy the stake from Bank of America Corp. and Barclays PLC.
Lehman's estate owns 73.5 percent of Englewood, Colo.-based Archstone and has sought to buy the remaining 26.5 percent that it doesn't already own.
BofA and Barclays joined Lehman in a $22.2 billion leveraged buyout of Archstone-Smith Trust in 2007.
Lehman initially owned a 47 percent stake in Archstone and the banks owned a 53 percent stake. In December, apartment owner Equity Residential offered to acquire a 26.5 percent stake in Archstone from the two banks for $1.33 billion. But Lehman exercised its right to match other offers for the stake and acquired it instead.
Under the terms of the deal for BofA and Barclays' final piece of Archstone, Equity Residential will be paid $150 million, including an $80 million breakup fee and $70 million from Lehman, the Journal reported, citing unnamed persons familiar with the matter.
The deal comes as the US apartment market has been gaining strength, buoyed by a pickup in job growth that is encouraging more people who have been sharing housing with relatives or roommates to rent on their own.
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