Lehman Pulls Bid for Tyco’s CIT Unit

Lehman Bros. Holdings Inc., an advisor to Tyco International Ltd., withdrew its $5-billion bid for the company’s CIT finance unit after word of the transaction leaked to the media, people familiar with the deal said.

Lehman, one of 11 firms advising Tyco on an initial public offering of the unit, had made a cash bid for the conglomerate’s finance arm and was waiting to hear from Tyco. Tyco is trying to sell CIT to help repay as much as $14.15 billion of debt by the end of 2003, though the company has said there’s enough cash to meet payments through February without a sale.

Tyco estimated last month it would reap $6.5 billion in proceeds from an initial stock sale of CIT, less than the $9.5 billion it paid in June.

Shares of Tyco, which climbed as much as 6.3% after the bid was reported, fell 67 cents to $23.70, and shares of Lehman dropped $1.15 to $64.57, both on the NYSE.