Merrill Lynch's ace up its sleeve

KBW has put a value on Merrill Lynch's 49 percent stake in asset manager BlackRock: $30 to $35 billion, reports MarketWatch. This qualifies as a crown jewel in the Merrill portfolio of assets. If it had to sell half--we assume that BlackRock isn't going to tank; it's held up fairly well in this crisis--it could raise more than $15 billion. That's a significant amount of capital. We can only hope that Merrill Lynch will not have to fall back on that option. Recall that Merrill Lynch CEO John Thain and BlackRock CEO Larry Fink held extensive discussions about such a deal recently. On a related note, Merrill and BlackRock have amended their shareholder and distribution agreements. Merrill Lynch picks up more latitude to "form or acquire asset managers substantially all of the business of which is devoted to nontraditional investment management strategies such as short selling, leverage, arbitrage, specialty finance and quantitatively-driven structured trades," according to a filing. Not that Merrill ought to be jumping into these areas right now.  

For more:
- here's the MarketWatch article

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