Dow Jones

NEW YORK —Lehman Brothers Holdings Inc. and Bear Stearns Cos., which just months ago were seen as the next takeout targets in the summer’s consolidation craze, are likely to go it alone for now, analysts say.

“Consolidation in investment banking is over. At least for now, the big deals are done,” said Steven Eisman, an equity analyst at CIBC World Markets.

Weaker fixed-income trading and slowdowns in the underwriting and mergers and acquisition businesses will probably cut into fourth-quarter profits at most firms, scaring off potential acquirers, Mr. Eisman said.

“Most investors think the probability is lower,” said Guy Moszkowski, a Salomon Smith Barney analyst. “Acquirers should be fishing when the market is weak, but they tend to get scared when the market is as poor as it is now.”

At Lehman, sour memories of the company’s marriage to American Express Co. remain strong. Lehman was bought by American Express in the mid-1980s, only to be spun off a decade later after the relationship failed to produce the profits both companies envisioned.

But an acquisition may make the most sense for Bear Stearns, analysts said.

With a market cap of about $5 billion, the company is about one-tenth the size of Merrill Lynch & Co. and less than half that of Lehman. “They’ve lost a lot of their share in investment banking for years,” Mr. Moszkowski said. “Over time, there will be more pressure for Bear Stearns to do something.”

Still, Bear Stearns chairman Alan Greenberg’s reported desire to sell the company for four times its book value, or about $118 a share, is not considered palatable to acquirers, especially in today’s bearish market, analysts said.

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