Frankly this is going to create (is creating) one heck of a buying opportunity in a great franchise; and to boot Blackrock has first dibs at buying the portion Merrill will choose (if they do) to sell off. This is not something that signals a change in operations or opportunity for Blackrock, simply a unique exogenous event.
- With his options limited, and time running out, Merrill Lynch CEO John Thain is now seriously considering selling all or part of the firm's 49 percent stake in money-management powerhouse BlackRock as a way to raise new capital, CNBC has learned.
- People close to both say that Thain’s decision is just weeks away and is prompted, at least in part, by a recent chilly reception he received from another firm that Merrill holds a stake in, Bloomberg LP.
- Like Bloomberg, Blackrock has first dibs on any sale of Merrill’s stake in the firm. As of now, Blackrock has received no formal offer by Thain to sell, nor is there a board meeting scheduled for a deal, according to people close to the firms.
- But executives close to both firms say people at Blackrock believe Thain is inching closer to a sale of all or part of its stake, currently valued at around $10.5 billion, if Thain decides he needs to raise added capital. These same executives say the situation is fluid, and Thain’s plan could change.
- Although no final decision has been made by Thain, he has told senior executives inside Merrill that if the company needs capital, he will try to sell assets like its Bloomberg and BlackRock stakes first, before selling shares and diluting stockholders even more.
- Sources close to Merrill say Thain may not sell the entire chunk and even if he does, the two firms may still do business. Blackrock manages Merrill’s asset management business, and that relationship may stay in tact through some sort of partnership.
5 comments:
This is an investing development. And I totally agree. I was also wondering why BLK was getting a little woodshed action. I had thought that somehow the BSC portfolio was causing problems, but I was under the impression, they are managaging it only. But even if BLK has first dibs, that's like a 50% stock buyback. I dont know if they will want to stand under that much of even their own stock. I wonder if some BLK shares are already getting unloaded in the market.
A buying opportunity? I think so.
Fortis expects a complete collapse of the US financial markets within a few weeks. That explains, according to Fortis, the series of actions by the bank of last Thursday to raise €8 billion.
“We have been saved just in time. The situation in the US is much worse than we had thought”, says Fortis chairman Maurice Lippens.
Fortis expects bankruptcies among the 6000 capital-starved American banks. "But with Citigroup, General Motors, a complete meltdown in the US is beginning.”
http://www.telegraaf.nl/dft/nieuws_dft/1359966/__Amerikaanse__meltdown__reden_geldinjectie_Fortis__.html
That's the CEO of one of the leading European banks...
That's the problem with BLK. The neighbourhood is just plain rotten.
if you are correct, that the financial system is near a total meltdown; wouldn't that be a positive for the real estate market?
assuming some level of financing [if needed], perhaps an investment in rental real estate would suffer less errosion of value than a paper asset
and to extend my comments,
the PPT would be on the scene licky-de-split, re-inflating the financial system [and eroding the damage from the excesses of the past]
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