Street Talk: Lehman Files for Bankruptcy, Merrill Is Sold
  • After frantic takeover talks with Bank of America and Barclays ended over the weekend—and after the U.S. government declined to provide a bailout—Lehman Brothers was forced to file for Chapter 11 bankruptcy protection this morning, marking an end to the 158-year-old firm. [Bloomberg, NYT, WSJ]
  • Merrill Lynch's John Thain hammered out a deal with Bank of America instead, selling the firm for $50 billion, a deal expected to reshape the banking landscape and make the nation's largest commercial bank even bigger. [WSJ, Bloomberg, NYT, WSJ]
  • AIG reached out for a lifeline over the weekend as the largest insurer in the country watched its stock precipitously. [Bloomberg, WSJ]
  • The frenzied weekend of negotiations began on Friday when Treasury Secretary Hank Paulson, Federal Reserve Chairman Ben Bernanke and New York Fed chief Timothy Geithner began discussions with nearly 30 Wall Street chief executives. Lehman's chances of survival quickly evaporated when the Fed decided it would not provide any guarantees to prospective buyers. [WSJ, NYT, WSJ]
  • "Goldman Sachs and Morgan Stanley look like survivors in Wall Street's purging of stand-alone investment banks. But the prize will be bitter." [WSJ]
  • Mayor Bloomberg cancelled his plans this weekend to be on hand for the negotiations. [NYSun]
  • Temasek Holdings, the biggest shareholder of Merrill Lynch, may reap as much as $1.5 billion from the sale of the firm to Bank of America. [Bloomberg]
  • Dozens of lawyers have been involved in the dealmaking: the Lehman bankruptcy was handled by Harvey Miller of Weil Gotshal; Merrill was represented by Shearman & Sterling; and Bank of America tapped Ed Herlihy of Wachtell, Lipton, Rosen & Katz. [Dealbook]
  • In non-Lehman/Merrill news, Walgreen's has made a $2.8 billion bid for for Longs Drug Stores Corp., going head to head with CVS. [WSJ]
  • Best Buy will acquire Napster for $126 million. [CNN]
  • Oil prices fell sharply Monday after reports that Hurricane Ike did not do as much damage as was originally feared. [CNN]
  • The former chiefs of Fannie Mae and Freddie Mac may not get those big golden parachutes after all. [WSJ]
  • Former Citi chief Chuck Prince has a new job: He'll be advising Washington-based consulting firm Stonebridge International. [WSJ]