NEW YORK (Reuters) - Merrill Lynch & Co (MER.N: Quote, Profile, Research, Stock Buzz) Chief Executive John Thain is considering selling other investments to drum up capital aside from its stakes in BlackRock and Bloomberg, CNBC said on its Web site on Sunday, citing people familiar with the firm.
CNBC said ratings agencies are raising issue with the possible sale of Merrill's 49.8-percent stake in BlackRock -- the largest publicly traded U.S. asset management company -- because it is a core asset that produces a steady stream of revenue.
For these reasons, Thain is trying to minimize the amount of the BlackRock stake he has to sell to raise capital, CNBC said, citing sources.
The report also said Merrill's write-down for the second quarter could exceed $6 billion, citing a person familiar with the investment bank.
Merrill did not immediately return calls for comment.
If analysts' current estimates of up to $6 billion of write-downs are accurate, Merrill could need to raise roughly $5 billion of capital, one person briefed on the matter had told Reuters earlier this month.
The company could reach that level by selling the 20 percent stake in Bloomberg, which Thain has said could be worth $5 billion to $6 billion.
Merrill has recorded more than $30 billion if write-downs since the third quarter of last year. Analysts say the third-largest U.S. broker-dealer suffered in the second quarter as bond insurers lost their top ratings and the structured credit market weakened.
Tuesday, July 15, 2008
Lehman Brothers' mulls strategic alliance, other options: report
Mon Jul 14, 2008 8:23am EDT
NEW YORK (Reuters) - Lehman Brothers' (LEH.N: Quote, Profile, Research, Stock Buzz) executives, seeking to shore up the brokerage's share price, is mulling options including a strategic alliance with a partner, the Wall Street Journal reported on Monday.
The investment bank is also considering a form of share buyback or an asset sale, the newspaper said, citing people familiar with the matter.
Over the weekend, Lehman executives participated in conference calls with senior members of the U.S. Federal Reserve and the Securities and Exchange Commission on the situation facing the firm.
Lehman shares plunged to nine-year lows on Friday amid concern that the mortgage market's woes would hurt its fixed income business. The investment bank has lost about a third of its market value over the past two weeks and has been the focus of some rumors that later turned out to be false.
SEC staff members are expected to visit the firm's midtown Manhattan offices on Monday, a person familiar with the matter told the WSJ.
Lehman Brothers spokeswoman Kerrie Cohen declined to comment.
NEW YORK (Reuters) - Lehman Brothers' (LEH.N: Quote, Profile, Research, Stock Buzz) executives, seeking to shore up the brokerage's share price, is mulling options including a strategic alliance with a partner, the Wall Street Journal reported on Monday.
The investment bank is also considering a form of share buyback or an asset sale, the newspaper said, citing people familiar with the matter.
Over the weekend, Lehman executives participated in conference calls with senior members of the U.S. Federal Reserve and the Securities and Exchange Commission on the situation facing the firm.
Lehman shares plunged to nine-year lows on Friday amid concern that the mortgage market's woes would hurt its fixed income business. The investment bank has lost about a third of its market value over the past two weeks and has been the focus of some rumors that later turned out to be false.
SEC staff members are expected to visit the firm's midtown Manhattan offices on Monday, a person familiar with the matter told the WSJ.
Lehman Brothers spokeswoman Kerrie Cohen declined to comment.
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