Merrill Lynch (MER) is “moving closer” to selling off its stakes in Bloomberg and Blackrock, the WSJ says.
Merrill is hoping to net $5 billion from its 20% stake in Bloomberg, valuing the entire company at about $25 billion. Bloomberg has a right of first refusal, which could complicate a deal.
Merrill’s 49% stake in Blackrock is worth about $12 billion, but Merrill will likely try to retain some of its interest in order to maintain a “strategic alliance” with the firm.
The sale of the two stakes is likely to net Merrill $5-$10 billion of cash (the Bloomberg sale is taxable). This will reduce the likelihood of further shareholder dilution in the face of an additional $6 billion writedown expected in Q2.