Lehman strategic plan in sight as KDB talks end

Lehman Brothers will try to regain investor confidence on Wednesday with a set of "key strategic initiatives" as hopes for a Korean-led rescue crumbled only hours ahead of the planned announcement.
The struggling U.S. investment bank's plan could include the sale of a package of British real estate assets to BlackRock Inc to raise much-needed capital and survive the credit crisis.
Earlier on Wednesday state-run Korea Development Bank confirmed talks had ended with Lehman Brothers Holdings Inc over a possible investment.
The Wall Street Journal reported on its website that Lehman is in talks with BlackRock over the sale of UK residential real estate assets and could unveil a separate plan to spin off some commercial real estate assets into a new company, citing people familiar with the matter.
Blackstone and Kohlberg Kravis Roberts are each looking to buy parts of Lehman's real estate and asset management units, people familiar with the situation told Reuters on Friday. The real estate unit could be worth $5 bln, the sources said.
Lehman, a casualty of the U.S. subprime mortgage crisis, has brought forward the release of the initiatives and quarterly results by a week to 1130 GMT on Wednesday after its shares sank as much as 46% on Tuesday on growing concern over its ability to raise capital.
Lehman's shares trading in Frankfurt rose 8.2% to 7.15 euros by 0920 GMT, on optimism that some measures to help its capital position will be announced.
The fourth-biggest U.S. investment bank has already taken $7 bln in credit-related writedowns and losses since the start of the global credit crisis.
Facing what may be blns of dollars in additional writedowns, the bank has examined options from selling a stake to a Korean bank to spinning off its investment management unit, but investors have been frustrated at a lack of progress.
"We are announcing that we ended talks at this point in time because of a disagreement over conditions of a transaction and considering domestic and foreign financial market conditions," KDB said.
A South Korean government official said KDB had ended the talks with Lehman due to lack of progress.
World stocks fell towards two-year lows on Wednesday as the problems faced by Lehman stoked concern that banks are struggling to rebuild capital and financial markets remain brittle. The yen trimmed losses, while bonds remained in red.
"Lehman's meltdown won't probably be the last negative episode of this credit crisis," said Christian Jimenez, president of Imene Investment partners, in Paris.