The Lehman Saga Continues

Lehman Brothers' latest march toward the once-unthinkable price of $10 a share was interrupted when a Korean bank expressed interest Friday in the struggling brokerage firm, according to a report by Fortune. The question now is whether CEO Dick Fuld is willing to reciprocate.

A spokesman at the Korea Development Bank in Seoul told Fortune Friday that the state-run firm "is considering all kinds of options [with respect to] Lehman Brothers," including an outright purchase.

The news sent Lehman's stock, which has lost three-quarters of its value this year as investors worry about potential losses on the firm's big mortgage portfolio, up more than $2, to $15.93 a share in heavy trading. The shares closed up 69 cents at $14.41.

The market was upbeat because Fuld - after weeks scouring the globe for a strategic investor and getting rebuffed at every turn - now has a chance to do a deal that will put the firm on stronger footing.

Analysts say the stock price has already factored in a possible $3 billion to $4 billion write-down when Lehman Brothers posts third-quarter results in mid-September. They say the fact that shares haven't gone into a total freefall shows the market's confidence that Lehman will indeed emerge from the current crisis -- though perhaps not still independent or in one piece, says a report by the Associated Press.

One high-profile analyst says the clock is ticking. Richard Bove, of Ladenburg Thalmann, told Bloomberg TV on Friday, that Lehman risks a hostile takeover if it doesn't act soon.