People familiar with the deal, which is expected to be announced soon, told The Financial Times that the deal will allow Lehman to take complete charge of Archstone and a possible initial public offering.
BofA and Barclays had agreed to sell a 26.5% stake in Archstone to Equity Residential for $1.3bn in early 2012, but the transaction was sidelined when Lehman exercised its right of first refusal on the stake.
Eventually, Lehman had sought a bankruptcy court approval to acquire the final portion of Archstone by using the estate’s cash.
Equity, which owns over 50,000 apartments in the US and Germany, is a competitor to Archstone and as part of the transaction is expected to receive an $80m break-up fee and an additional $70m, as reported by the Wall Street Journal.
In 2007, Archstone was bought by Lehman in partnership with BofA and Barclays in a $22bn leveraged buyout deal prior to its collapse and filing of bankruptcy in 2008.
Earlier this year, Lehman has announced that it has emerged from bankruptcy and agreed to begin paying out creditors.
