Korean Development Bank in Talks to Buy Stake in Lehman

Shares of Lehman Brothers are up 2.8% on Monday after the state-owned Korean Development Bank (KDB) affirmed interest in the embattled Wall Street firm.

Broader equity markets are also being lifted by news that a foreign firm is interested in taking a stake in a U.S.-based company. The optimism comes after KDB chief executive Min Euoo Sung told local journalists, "I think it is desirable to make a joint bid for Lehman Brothers. So KDB is in talks with other commercial banks on forming a consortium."

The story first appeared in the London Telegraph, which reported talks could conclude this week and may result in $6 billion capital infusion from the state bank in exchange for up to a 25% stake in the firm. The market cap of Lehman is $11.2 billion following the 75% decline in company shares in the past year.

The KDB chief executive did cast some doubt on the deal, saying there are concerns about Lehman's liabilities.

"It is difficult to predict the outcome of negotiations with Lehman Brothers due to differences over price � there are differences over the scale of Lehman Brothers' potential liabilities."

By Adam Button and edited by Sarah Sussman