Merrill Lynch's board of directors has alerted BlackRock chairman Larry Fink that he can take over as CEO if he so choses, CNBC has learned. Fink, according to sources close to the matter, has said he will take the next two weeks to decide.
CNBC.com
Merrill Lynch
One problem for Fink is his ownership stake in Blackrock, the large money management firm that he founded and is now in a joint venture with Merrill Lynch.
Blackrock managed Merrill Lynch's asset management business and Merrill through its brokerage network sells BlackRock mutual funds. But if Fink took over as Merrill CEO, it could be seen as a conflict because Merrill sells BlackRock funds and it is prevented from favoring in-house mutual funds over others when it deals with its brokerage clients
A native Californian with deep roots in the mortgage markets, Fink has won praise from analysts, investors and rivals for transforming BlackRock from a small bond shop into America's largest publicly traded asset manager.
Larry Fink
Larry Fink
This year alone, BlackRock delighted investors with a 28 percent jump in its share price and news that it pulled in $41 billion in new assets in the third quarter, far more than any rival. Fink, 54, founded the company with seven partners in 1988 after working at private equity firm Blackstone Group.
Famous for the long hours he keeps, Fink is also known for navigating turbulent markets, wooing and keeping top talent, and speaking plainly about all types of topics, according to people who work with him and know him.
Merrill had its biggest drop in 18 years, falling as much as 12 percent Friday morning, before the company said that it was not aware of any inappropriate transactions. Merrill's stock closed down 7.9 pct, or $4.91, to $57.28.
Its shares have lost 38.5 percent so far this year, shaving more than $35 billion off its market cap.
Merrill has been in turmoil after an $8.4 billion write-down in the third quarter caused a $2.3 billion loss, the biggest in the company's history. Analysts expect additional write-downs on collateralized debt obligations, with estimates of $5 billion to $10 billion.
-- Wire services contributed to this report.