Merrill to sell its 20 per cent stake in Bloomberg LP; calls on Michael Bloomberg: report

05 July 2008

Mumbai: Merrill Lynch & Co, hit by huge write-downs following the subprime mortgage market melt-down, is planning to sell its 20 per cent stake in financial news and data provider Bloomberg LP to a trust controlled by New York City Mayor Michael Bloomberg, reports quoting Wall Street sources said.

Reports also said the terms of the sale and the valuation of the stocks remained vague and nothing was final. Analysts have valued Merrill's stake at between $5 billion and $10 billion, reports said.

Merrill's 20 per cent stake comes from the seed money it had provided Blomberg in 1981 to launch business.

Michael Bloomberg, who became New York's mayor in January 2002, retains a majority stake in privately-held Bloomberg LP, but has given up day-to-day control.

Cash-strapped Merrill is planning to raise around $50 billion through sale of various assets and the Bloomberg stake sale is part of that, sources said, warning a deal could still fall apart.

Merrill also is looking at ways to sell its 49 per cent stake in investment banking firm BlackRock, the report said. Merrill's stake in BlackRock is worth an estimated $13 billion.