Lehman Brothers, in a desperate bid to survive, announced plans today to sell a majority stake in its prized investment management business and said a sale of the entire company was possible.

Lehman, battling the nation’s worst financial crisis since the Depression, also said it would spin off a troubled real estate unit and slash its dividend. Those moves come as the nation’s fourth largest investment bank reported an almost $4 billion third-quarter loss, boosting its losses so far this year to about $6.5 billion.

The nation’s fourth-largest investment bank said it will spin off between $25 billion and $30 billion of its commercial real estate operations and slashed its dividend to 5 cents from 68 cents in a move to save $450 million a year.

The moves are intended to prove to Wall Street that the embattled bank has enough liquidity to survive.

But Lehman also said it is open to “examining all strategic alternatives to maximize shareholder value” which on Wall Street suggests it would consider a bid for the entire company.

Lehman Brothers Holdings Inc., whose shares have plunged more than 80% this year as investors lost confidence in the company, said it lost $3.9 billion during the third quarter. The company, like others on Wall Street, suffered from wrong-way bets on mortgage securities and other risky assets.

“This is an extraordinary time for our industry, and one of the toughest periods in the firm’s history,” the Chief Executive, Richard Fuld, said in a statement. “The strategic initiatives we have announced today reflect our determination to fundamentally reposition Lehman Brothers by dramatically reducing balance sheet risk, reinforcing our focus on our client-facing businesses and returning the firm to profitability.”

Lehman shares rose 61 cents, or 7.8%, to $8.40 in morning trading.

Lehman’s quarterly loss includes gross write-downs of $5.3 billion on residential mortgages and $1.7 billion on commercial real estate positions. The results reflect a continued decline in Lehman’s portfolio — in the second quarter the company lost $2.8 billion for the period, and in the year-ago period it posted profit of $887 million.

Lehman said it has reduced its residential mortgage exposure by 31% to $17.2 billion, and expects its sale of $4 billion of its British residential mortgage portfolio to BlackRock Financial Management Inc. to be completed within the next few weeks.

Lehman Brothers also reduced its commercial real estate exposure by 18% in the third quarter to $32.6 billion from $39.8 billion.

The company did not name a buyer for a 55% stake in its investment management business, which includes the prized Neuberger Berman asset management unit.

The bank said the spinoff of the commercial real estate portfolio into a separate publicly-traded company, Real Estate Investments Global, will be completed in the first quarter of 2009.

“Taken together, these actions will quickly de-risk and resize the firm,” Mr. Fuld told investors on a conference call. “We will have what we believe to be a strong and clean balance sheet that will allow us to focus on our core client businesses. In addition, we remain committed to examining all strategic alternatives to maximize shareholder value.”

With a spinoff of Lehman’s real estate assets slated for early next year, the company’s next injection of capital will come once a deal to sell a stake in its investment management business is completed. He said the firm was in late-stage talks with potential buyers for the investment management division, which analysts value at up to $10 billion for the entire business.

Wall Street remains skittish about financial stocks since the near-collapse of Bear Stearns Cos. in March. Like other investment banks, Lehman has been hit hard by deterioration in the credit and mortgage markets since the middle of 2007. Global banks have so far lost more than $300 billion from mortgage-backed securities and other risky investments.

The announcement on today could help convince investors that Mr. Fuld is handling the crisis, and will right its damaged balance sheet, analysts said. He took responsibility for a $2.8 billion second-quarter loss, which was the first since Lehman spun off from American Express Co. in 1994.

Lehman has approached a broad range of possible investors, including banks in Korea and Japan. Private-equity firms in America have also been contacted about investing in the investment-management business.

But today, state-run Korea Development Bank said it has ended talks with Lehman, citing “differences in transaction terms with Lehman and in consideration of the domestic and international financial market situation.” It did not elaborate.

Besides Neuberger Berman, the business also includes everything from private client services to private equity components. Analysts believe it the entire business is worth up to $10 billion.

There is also talk that Neuberger’s management might get an opportunity to buy back all or part of the company. Lehman bought the firm in 2003, and Neuberger executives have expressed interest in completing such a deal, according to several media reports.