On Monday, Lehman Brothers Holdings (NYSE: LEH) fell 13% after announcing a management restructuring. Some speculated that investors were disappointed because the management changes suggested that Lehman's well-publicized talks to sell a stake to Korean financial interests had failed. CNNMoney confirms this morning that those talks have ended.

CNNMoney interviewed the chairman of Korean Development Bank (KDB), which "sent a proposal to Lehman to buy 25% of [Lehman] for as much as $5.3 billion," who confirmed that talks had ended but did not make it clear why. (Such a deal would have been a 116% premium to its current market value). As CNNMoney wrote, "The two companies have been discussing the possibility of KDB taking a stake in Lehman but Korean regulators had been cautious about the deal. Jun told Dow Jones Newswires that the talks were now over, but he declined to say what conclusions, if any, had been reached."

CNNMoney also reports that no other Korean financial institutions wanted to join KDB. It reported that "all major financial institutions in South Korea - Kookmin Bank, Woori Finance Holdings, Shinhan Financial Group and Hana Financial Holdings - said that they weren't interested in joining a consortium to invest in Lehman due to economic uncertainties on the local front."

But yesterday, the failure of those talks had not been announced yet. They were only inferred. Did someone trade on the knowledge that the talks had failed? It might be worth investigating.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

The Associated Press reports that the head of Korean Development Bank (KDB) has revealed that he and a consortium of other Korean investors are in talks to acquire Lehman Brothers Holdings Inc. (NYSE: LEH). Rumors of a KDB deal were floated last month, but KDB refused to confirm them. Now, perhaps talks are further along.

Where do such talks stand now? AP quotes KDB Governor Min Euoo-sung who "said that discussions were under way to form a consortium with private banks as (we) believe it is more desirable to acquire Lehman Brothers jointly rather than alone." Min is no stranger to Lehman -- AP reports that Min was "CEO of Lehman Brothers' South Korean operations until taking the helm of KDB earlier this year."

These talks come as Lehman reportedly is in talks with China's CITIC Securities or sovereign wealth funds from Abu Dhabi and Qatar to inject $6 billion in capital into Lehman. With all this smoke, could there be fire? We'll soon see. But the odds that Lehman will remain independent continue to tumble.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.