Goldman: Merrill May Sell Bloomberg Stake To Raise Cash

Goldman Sachs thinks Merrill Lynch (MER), reeling from its $32 billion mortgage gambling tab, needs to raise another $5-$10 billion to bolster its balance sheet. How to do it? In a note Friday, Goldman suggests selling its 20% stake in Bloomberg LP:

Management has suggested it does not plan to raise any common equity; however, we would not be surprised to see the firm raise alternative sources of capital such as preferred or sell certain assets such as Bloomberg.

How much is Merrill’s Bloomberg stake worth? About $4 billion. But CEO John Thain has said as recently as January that he wouldn’t be selling Bloomberg, or Merrill’s 49.8% stake in BlackRock.

Goldman also lowered its 2008-2010 EPS estimates for Merrill to $0.08/$4.35/$5.40 from $0.70/$4.70/$5.80 due to “deterioriating core business trends.”

See Also:
Merrill Takes Another $9 Billion in Gambling Losses, Firing 4,000 People Not Responsible

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