Facing second-quarter write-downs that could top $6 billion, Merrill Lynch & Co. C.E.O. John Thain is contemplating selling other investments in order to raise capital, including its stake in Bloomberg LP, according to a report by CNBC.com.
Thain, analysts say, is trying to minimize the amount of BlackRock stake he has to sell to raise capital because the mutual fund manager is considered one of Merrill Lynch's core assets and produces a steady stream of revenue. Merrill Lynch owns 49 percent of BlackRock, which also manages pension funds.
Thain is hoping to raise as much as $6 billion from Merrill Lynch's 20 percent stake in Bloomberg. Merrill and Bloomberg have had preliminary talks about selling Merrill's 20 percent stake, with Merrill asking for $6 billion while Bloomberg has countered with $3 billion, according to CNBC.com.
Bloomberg is profitable for Merrill but not seen as a core asset, analysts say.
Merrill, add analysts, has other smaller assets that might also produce the desired capital.
Negotiations with Bloomberg and BlackRock have been ongoing and a deal could be announced this week.
Merrill Lynch, the country's third largest broker-dealer, has recorded over $30 billion in write-downs since the third quarter of 2007, according to reports. Exposure to mortgage-backed securities and collateralized debt obligations has helped it stock plummet by 45 percent since early May.
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