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Merrill Will Decide on BlackRock Stake Sale Soon

Charles Gasparino, CNBC On-Air Editor
Monday, 7 Jul 2008 | 2:23 AM ET

Merrill Lynch will decide whether it will sell its stake in BlackRock early this week, CNBC has learned.

Merrill Chief Executive John Thain will likely sell no more than a 25 percent stake in BlackRock , but that situation could change depending on the size of Merrill's writedowns, according to people inside BlackRock.

Merrill agreed to sell its investment management business to BlackRock in February 2006, taking a 49.8 percent stake in the asset manager.

Merrill has also held preliminary talks with Bloomberg about selling its 20 percent stake in the financial data and news provider. Thain recently told analysts that Bloomberg "is just an investment" while BlackRock is "more strategic", though he said Merrill may have to sell both particularly if the writedown is large enough.

People at the meeting said Thain had indicated Bloomberg would be sold first followed by BlackRock. He also said he wanted $6 billion for the Bloomberg stake, a value some Wall Street executives have said is overly optimistic. Bloomberg initially offered $3 billion.

The sale will likely be done somewhere in the middle, but with the downturn in Wall Street Bloomberg may be facing cash constraints and unable to come up with $6 billion.

But at the moment the situation is fluid and Thain could decide against selling either stake or both.

The possible sale of stakes is bittersweet for Merrill insiders and investors, who said the company is lucky to be in a position to raise cash, but that Merrill is throwing away diversified investments and future performance.

As the sales are progressing, Thian is also working to deleverage Merrill's balance sheet.

-- Reuters contributed to this report

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