Merrill to sell Bloomberg stake for $4.4 billion

Merrill to sell Bloomberg stake for $4.4 billion

Merrill Lynch has agreed a deal to sell its 20% stake in Bloomberg back to the news and financial data company for a price approaching $4.5 billion.

Merrill chief John Thain has been hawking the firm's stake in Bloomberg for weeks as he looks to offset billions of dollars in crunch-related write downs at the US investment bank.

Thain had initially valued the Bloomberg stake at up to $6 billion. The estimated $4.5 billion deal puts a $20 billion price tag on the news and information vendor and raises the estimated net worth of its eponymous founder to $15 billion.

Thanks to his 70% stake in the firm, the mayor of New York would rise to roughly 42nd place on the Forbes rich list, trailing Microsoft co-founder Paul Allen and maverick investor Kirk Kerkorian, but ahead of Microsoft's current chief executive, Steve Ballmer, and Fidelity's Abigail Johnson.

Merrill is understood to have dropped plans to sell its stake in giant investment house Blackrock.

An announcement confirming the news is expected when Merrill unveils its financial results late Thursday.

UPDATE: Merrill issued the following statement as part of its second-quarter results presentation: "Earlier today, Merrill Lynch completed the sale of its 20% ownership stake in Bloomberg, L.P. to Bloomberg Inc., for $4.425 billion, and as part of this transaction has entered into a long-term service agreement. Merrill Lynch is also in negotiations and has signed a non-binding letter of intent to sell a controlling interest in Financial Data Services, Inc. (FDS), based on an enterprise value for FDS in excess of $3.5 billion. FDS is currently a wholly-owned subsidiary of Merrill Lynch and is a provider of administrative functions for mutual funds, retail banking products and other services within Global Wealth Management (GWM). Merrill Lynch has provided Bloomberg Inc. with debt financing and intends to provide debt financing for the FDS transaction on a commercially reasonable basis."

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