NEW YORK, May 24(Reuters) - Lehman Brothers Holdings Inc, one of three o
wners of Archstone, has reached a deal to buy the last portion of the apartment company it does not own for $1.58 billion, said a source familiar with the deal on Thursday.
Lehman will buy the 26.5 percent of Archstone that it already does not own from Bank of America Corp and Barclays Plc.
In January, Lehman bought half the banks' stake, or 26.5 percent of the Archstone, for $1.325 billion. That came after Barclays and Bank of America agreed to sell the 26.5 percent stake to Equity Residential, whose chairman is Sam Zell. However Archstone's ownership structure gave Lehman the right to match the offer.
The last slice of Archstone was critical to Lehman because under the ownership structure a unanimous vote was required for all important decisions regarding Archstone.
The deal the banks and Equity Residential struck in December also allowed Zell's company to bid for the last slice of Archstone should it not get the first slice. The second 26.5 percent stake carried a price tag of at least $1.325 billion but that was later raised to $1.5 billion.
The original deal with Equity Residential included a break-up fee for Zell's company of at least $80 million. Under the deal for the final slice, the break up fee will rise by $70 million for a total of $150 million, the source said.
Representatives from Archstone and Lehman did not return phone calls seeking comment.
(Reporting by Ilaina Jonas; Editing by Lisa Shumaker) Keywords: LEHMAN ARCHSTONE/
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