Hank Greenberg

Are Lehman Investors Confident In Fuld Or In A Sale?

When Lehman announced it was firing chief financial officer Erin Callan and president Joseph Gregory yesterday, there was a lot of speculation about whether investors in its recent $6 billion sale of common stock and preferred shares might try to pull out. Couldn’t these top level changes trigger some sort of material adverse change that would let investors back away?
Several big investors have now indicated that they are staying on a Lehman. BlackRock, former American International Group CEO Hank’ Greenberg and New Jersey’s pension fund have all indicated, either publicly or privately, that they are sticking with their investment commitments despite the fact that the share price has fallen well below the levels at which they agreed to buy. Blackrock has gone on record with comments supporting Lehman’s “leadership,” which these days basically means chief executive Dick Fuld.
But are these investors really backing Fuld and his newly announced team? The stock is up today by over 10% but at just over $25 per share it still has away to go before it climbs back to the $28 per share price investors in the $6 billion stock issuance paid. As a long-term investment, this might make sense. But perhaps what these investors are betting on is a buyout of Lehman.
“Lehman increasingly looks like it could be an acquisition bet,” one merger-arb investor told us today. “I’d say that’s the only short-term upside.”

BlackRock Bought Lehman Shares, Confident in Leaders

Carl Icahn and Hank Greenberg: No Time For Golf

carlicahngolf.jpgCarl Icahn and Hank Greenberg don’t play golf. And they don’t like executives who do. On Wednesday we went to the Wall Street Journal’s Deals and Dealmakers conference, and while everyone else was frantically scribbling down what Treasury Secretary Hank Paulson said about globalization—hint: he’s for it—we found ourselves more interested in the slightly less, well, earth moving details.
Golf—arguably the most popular pastime in America—didn’t score well with two headliners.
“I hate golf,” former AIG chairman Greenberg told the assembled crowd of investment bankers. “I play tennis. It doesn’t take long. Then I get back to work.”
After his talk we asked Greenberg about the popularity of golf among corporate executive.
“A lot of people like to get away from their work,” he said. “You have to wonder about whether they like what they’re doing.”
Icahn, the legendary corporate raider turned shareholder activist, was even more dismissive of golf. For him golf players symbolized the kind of clubby, chummy corporate executive he thinks is dragging down American business.
“These guys would rather play golf, slap each other on the back,” he said. “I want a guy running a company who sits in his tub at night thinking about the challenges he faces. The guy who can’t let it go. The focused guy.”
Yesterday we noted that Carl Icahn is not just short golf. He also tried to short Blackstone just after it’s IPO.