Lehman Brothers has let three bidders for its asset management unit know they are finalists, even though it has not yet decided to sell the unit. The Financial Times reports that Kohlberg Kravis Roberts, Hellman & Friedman and Bain Capital remain in the running because their bids were high enough.

Out of the running are Blackstone and Carlyle. Blackstone was not sufficiently interested in the unit's hedge funds and did not want to bear the costs of retaining Neuberger Berman's managers, according to the report. Carlyle had offered to take Lehman's optimal deal terms of buying the entire unit and giving the brokerage the chance to buy it back at a future date, however, it only offered $7 billion.

The decision whether or not to sell the unit will hinge on the amount of writedowns Lehman has for the third quarter.  

Edited by: Erin Kello


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