WASHINGTON U.S. authorities were in intensive talks with Lehman Brothers over a possible sale of the troubled investment bank to one or more parties, a source with direct knowledge of the discussions said.
A number of firms are looking at Lehman and at least one is looking to acquire the entire firm, the source told Reuters on Thursday.
A number of other options are also being considered, including a partial sale, government intervention, or unwinding of Lehman's assets, this source said.
The Washington Post, citing sources familiar with the matter, reported the Treasury Department and the Federal Reserve were assisting in a sale of the investment bank and were talking to a wide range of firms.
The Wall Street Journal said Lehman was actively shopping itself to potential buyers, including Bank of America.
Both the Washington Post and the Wall Street Journal said a deal could be announced before Asian markets open on Monday morning.
The source who spoke to Reuters said Lehman and other parties are determining what the terms are and that no firm had made an explicit bid at this time.
Lehman's chief executive Dick Fuld has stepped up efforts to sell the whole firm instead just pieces of its business, other sources familiar with the situation told Reuters.
The firm has a preference to continue as a going concern, the source with knowledge of the discussions said.
The U.S. Treasury Department and the Securities and Exchange Commission separately said on Thursday that market developments were being monitored and that they were in touch with market participants. The SEC and the New York Federal Reserve declined to comment specifically on Lehman.
The source knowledge of the discussions said the New York Fed, the Federal Reserve in Washington, the Treasury Department and the SEC, were in constant and continuous contact with Lehman.
(Reporting by Rachelle Younglai; Editing by Tim Dobbyn)