US judge set to approve Barclays’ takeover bid

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The British bank still needs final court approval from bankruptcy judge James Peck, but that is expected tomorrow.

Peck approved a $100 million break-up fee for Barclays if the deal falls through and said he would also clear $450 million in interim financing that Lehman is seeking from Barclays to fund operations until the sale completes.

In addition, Barclays will be entitled to £13.9 million in expenses if the deal fails to go through.

The British bank will also take control of Lehman's New York headquarters and two data centres in New Jersey for an additional £830 million.

"There is effectively one logical purchaser for these assets," Peck told a courtroom in Manhattan.
"That purchaser has identified itself, has been identified publicly to the markets, has been identified publicly to the employees and represents the continuity for this operation."

Lawyers for creditors and bondholders objected to the speed of the process, saying two days was not enough time to evaluate the deal, much less put together a competing bid.

But the judge said the sale was under "extraordinary" circumstances, and it needed to be expedited for the sake of the global markets.

Representatives from the US Securities and Exchange Commission, Federal Reserve, and Commodities & Futures Trading Commission said they supported the bid procedures.

On top of the US business of Lehman, Barclays is also considering acquiring some additional Lehman operations in Europe or Asia.