Lehman granted court OK for $390.24 million Wilton Re share sale

By Caroline Salls

Pittsburgh, Jan. 13 - Lehman Brothers Holdings Inc. received court approval to sell equity interests in Wilton Re Holdings Ltd. for a total of $390.24 million, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Lehman said it committed to acquire up to $300 million of Wilton Re's common stock in October 2006.

Under this agreement, Lehman initially acquired an interest in Wilton Re in 2008 and invested $100 million at $52.50 per share. It then acquired an additional $78 million at $59.45 per share.

The company later negotiated an amendment to the subscription agreement under which the remaining $122 million commitment was completed at a per-share price of $50, representing a 9% discount to the adjusted book value per share, according to court documents.

After investing a total of $300 million, Lehman said it now owns 5.66 million voting class A common shares of Wilton Re, or 25% of Wilton Re's outstanding shares.

According to the motion, Wilton Re has accumulated considerable excess capital over the past two years, but market conditions have limited its ability to identify suitable and attractive investment opportunities.

As a result, Wilton Re launched discussions regarding the repurchase of the shares owned by Lehman.

Lehman said it has agreed to a purchase price of $69 per share, for a total of $390.24 million in share sale proceeds, according to court documents.

The company said Wilton Re's offer of $69 per share is "significantly above market."

New York-based Lehman Brothers Holdings was the fourth-largest investment bank in the United States. The company filed for bankruptcy on Sept. 15, 2008 under Chapter 11 case number 08-13555.

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