Tuesday, December 25, 2007

Merry Christmas

Merrill Lynch will sell up to $5 billion in shares to Singapore's Temasek Holdings, $4.4 billion immediately, with an option to buy another $600 million later. If Temasek exercises its option, it will be right at the 9.9% foreign ownership limit. Merrill Lynch is selling another $1.2 billion in shares to asset manager Davis Selected Advisers. Both investors bought their stakes at $48 a share, or more than 13% below where the stock closed on Friday. News of the discount, not to mention the 13% dilution to existing shareholders due to this investment, pushed Merrill shares 3% lower. The announcement of these deals is likely a prelude to another large write-down for Merrill Lynch in the fourth quarter, with some analysts estimating the hit will be bigger than the $8.4 billion write-down Merrill recorded in the third quarter. (Sources: Yahoo, The Australian)

In related news, Merrill Lynch Capital, the middle-market commercial finance business of Merrill Lynch, is being sold to GE Capital. Terms of the deal with the GE unit weren't disclosed, but Merrill Lynch said the deal will enable it to redeploy about $1.3 billion into other parts of its business.

http://www.cnn.com/2007/BUSINESS/10/24/merrill.mortgages/index.html

2 comments:

ALD said...

CNN linked to this blog post. Sphere is a wonderful thing; I need to figure out about installing it on my blog.

http://www.cnn.com/2007/BUSINESS/10/24/merrill.mortgages/index.html

tMmM! said...

Might I also suggest figuring out how to hotlink your urls? (I think it's only a matter of a button-click, if my own blogspot interface tells me true ...) I know you can't do it in a reply/comment, but you can edit it into your original post.

Interesting that CNN picked this up (and likewise the WSJ one on another of your blogs - though that one we couldn't access, thanks to the WSJ's policies). Have to keep an eye on your stuff here ...