KDB, Citic Walk Away From Lehman Investment

According to the Financial Times, Korea Development Bank and Citic Securities of China met with Lehman Brothers in early August to discuss a sizable equity investment in the US investment bank.  The talks failed.  The deal Lehman was negotiating with the South Koreans would have called for KDB to take a 50% stake in the beleaguered investment bank at a price of around 50% above book value.  Apparently, the two sides were close to a deal but last-minute disagreements caused negotiations to fall apart.  I can only speculate on what those disagreements may have been.  Perhaps the misunderstanding hinged on a translation problem.  Maybe KDB thought they were getting an investment at 50% of book value.  After all, Lehman's current market capitalization is less than half of book.  Once Lehman corrected the Koreans by stating that they expected an investment of 50% ABOVE book value, the Koreans balked.  Perhaps KDB then tipped off the Chinese bankers on the investment bank's  unreasonable expectations, as Citic declined to invest before getting very far with negotiations.  

Now we sit and wait for Lehman's next move.  Can it negotiate a sale of its mortgage assets at a reasonable price?  Maybe a sale of the asset management unit will be announced soon?  Lehman seems to want to strike some sort of a deal before the earnings announcement.  That can only mean one thing:  The announcement is bound to be ugly.