Merrill Would Consider Bloomberg, BlackRock Sales

Merrill Lynch CEO John Thain said on Wednesday that if it raised more capital, it would consider selling its stakes in news and financial data company Bloomberg and money manager BlackRock.


Speaking on a conference call, Thain said that he sees Merrill Lynchas "well capitalized," but he said the company last year considered selling its roughly $13 billion stake in BlackRock or its roughly $5 billion to $6 billion stake in Bloomberg.

Selling assets like Bloomberg or shares of BlackRock might make sense because Merrill Lynch's shares have lost almost a third of their value since the beginning of the year which makes selling common equity more expensive.

Thain has never said before that Merrill Lynch would consider selling its Bloomberg stake, and his willingness to shed one of the firm's best investments signals how difficult capital raising has become for investment banks.

Thain described the position in Bloomberg as "a very good investment", while noting the stake in investment manager BlackRock is "more strategic." Speaking on a conference call, Thain did not rule out a sale in the future.

"It is true that there are some liquidity restrictions on BlackRock and Bloomberg, but I don't believe that that would prevent us, if we decided to, from using either of them as means of raising capital," he said.

Speaking to reporters after the company's annual meeting in April, Thain had said Merrill Lynch did not have plans to sell its Bloomberg holdings, echoing comments he made in January.

Some investors believe the world's biggest brokerage should sell the stake because it is not one of Merrill's main businesses.

Shares in Merrill Lynch closed down $2.49, or 6.56 percent, to end the day at $35.46 on the New York Stock Exchange.