CRISIS MANAGEMENT

New York, Sept 10 (Reuters): Lehman Brothers Holdings Inc plans to sell a majority stake in its investment management unit and spin off commercial real estate assets, but failed to announce specific transactions and reported a third-quarter loss of $3.93 billion.

Shares of Wall Street’s fourth-largest investment bank gave up some of their overnight gains as investors expressed disappointment that Lehman, whose business model and outlook face wide scrutiny, did not announce more concrete actions.

“What you are dealing with is a confidence issue,” said Doug Roberts, chief investment strategist at Channel Capital Research in Shrewsbury, New Jersey.

“There is still an underlying level of uncertainty as to what Lehman’s future is. What people are saying is that there has been no resolution of the problem,” Roberts said.

World stocks fell towards two-year lows today as the problems faced by Lehman stoked concerns that banks are struggling to rebuild capital and financial markets remain brittle. The Japanese yen trimmed losses, while treasury prices fell.

In pre-market trading, Lehman shares were up $1.14, or 14.6 per cent, at $8.93 after earlier trading above $10. On Tuesday, the shares fell $6.36, or 45 per cent, cutting Lehman’s market value to $5.4 billion, down more than $40 billion since February 2007.

Lehman said it intended to sell about 55 per cent of a portion of its investment management unit, including asset management unit Neuberger Berman and the private equity and wealth management businesses. It said it was in “advanced discussions with a number of potential partners”.

The company also planned to spin off $25-30 billion of its commercial real estate assets into a new publicly traded company, Real Estate Investments Global.