Officials at Merrill Lynch and bankers representing Bloomberg LP are working overtime to complete the sale of Merrill's 20 percent stake in the financial-information powerhouse either sometime tonight or tomorrow morning, CNBC has learned.
Once the final terms of the Bloomberg sale are nailed down, Merrill will turn its attention to possibly selling a piece of BlackRock, according to people with knowledge of the discussions.
In negotiatons with Bloomberg, Merrill has said it wanted $6 billion for its 20 percent stake, while Bloomberg initially bid $3 billion. Sources close to both firms say the final number will likely end up somewhere in the middle. But the negotiations have recently turned difficult, with bankers representing Bloomberg squeezing Merrill on price, according to people familiar with the matter.
Merrill would like to get top dollar for its Bloomberg stake because it would like to minimize just how much, if any of its BlackRock stake it has to sell. Merrill owns 49 percent of the money management company, which in turn manages all of Merrill's mutual funds and pension funds.
Officials close to the negotiations say Merrill's CEO John Thain is leaning against selling a major portion of blackrock after hearing from rating agencies.
Thain was recently warned by New York rating agencies that selling even a portion of BlackRock could be problematic for Merrill's bond rating. BlackRock is considered a key asset since the money management firm manages Merrill pension funds and mutual funds. Merrill derives a steady stream of revenues from its investment in the company.
As of Monday night, Thain was not inclined to sell any portion of Merrill's 49 percent stake in the money management firm.
For that reason, Merrill has come up with a list of other assets to sell in addition to its 20 percent stake in Bloomberg LP.
Merrill has come up with a list of new assets to sell, which in additon to selling the Bloomberg stake, could make up for the expected second quarter loss and writedowns of $5 billion or more due to investment in risky mortgage backed bonds and keep the sale of BlackRock to a minimum or prevent a sale altogether.
Those assets include real estate, highly rated securities, buildings and an asset in the firm's private client group, people close to Merrill say. Speculation inside Merrill is swirling that the firm will sell all or part of a commerical bank that is owned by the brokerage division.
People close to the negotiations say Merrill will officially alert Blackrock sometime Tuesday morning about its decision.