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Monday, October 29, 2007
Merrill Might Try to Unload Bloomberg Stake

New York, NY - Amid a string of losses, including an $8.4 billion write down of assets for last quarter and the recent ouster of CEO, E. Stanley O'Neal, some analysts suggest that Mother Merrill might consider divesting itself of various "noncore assets", including the 20% ownership the firm has long held in financial information vendor, Bloomberg, LP.

Various analysts have estimated that Merrill's 20% stake in the global market data vendor could sell for between $5.0 billion and $10.0 billion.  However, Merrill might not find it too easy to find an external suitor for its minority stake as the firm cannot sell its shares to a competitor (aka Thomson / Reuters).  In addition, Bloomberg has a "right of first refusal" to repurchase Merrill's ownership in the business.

However, the time might be right for Merrill Lynch to try and divest itself of its Bloomberg stake as the quote vendor is growing, profitable, and extremely valuable.  In addition, Merrill might find it more cost effective to sell its ownership of Bloomberg rather than trying to sell its own securities -- particularly given the firm's recent problems.

A few of the suitors who might be interested in acquiring a minority stake in Bloomberg include News Corp. (the parent of Dow Jones), Moody's Corp., or McGraw-Hill (the parent of Standard & Poor's). Some market participants also suggest that sovereign investment pools from Dubai or China might also be interested.


Posted at 11:50 am by mwmayhew
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