Mitsubishi UFJ Financial denies Lehman bid

"The report is not true," MUFG spokesman Takashi Miwa said without elaborating further.

The Times reported Wednesday that MUFG would make a bid for a "substantial" stake in Lehman, which suffered billions of dollars in writedowns and credit losses in the crisis triggered by the meltdown in US subprime mortgages.

It possibly even aims to take control of Lehman, the newspaper said.

Citing senior sources close to Japan's largest financial group, the daily said MUFG views the possible acquisition of Lehman as a "once in a lifetime" opportunity.

If Lehman surprises the market with poor third quarter results next week, or fails to convince investors that it has an adequate plan to raise capital, leading the bank's share price to drop, MUFG will make a bid, it said.

A news report from Seoul said that state-run Korea Development Bank (KDB) has offered to buy a 25 percent stake in Lehman for more than four billion dollars.

The report from Seoul said the Korean bank also wanted the right to raise its stake to as much as 49 percent.