Bank of America to buy Merrill Lynch for $29 a share

September 14, 2008 by · Leave a Comment
Filed under: Industry News 

That was quick, it looks like they needed to move quickly.  I don’t want to think about how the market will react if two investment banks went belly-up this week.  $44 billion much less that what Merrill Lynch was worth last year of well over $150 billion dollars.

Release:

Bank of America Corp will acquire Merrill Lynch & Co Inc for $29 a share, a deal that will give the bank the world’s largest brokerage and a sizable investment bank, the Wall Street Journal reported on Sunday

The deal comes as bankers and regulators met in New York to figure out whether to rescue Lehman Brothers Holdings Inc, and if so, how. Those talks seemed increasingly likely to result in Lehman’s liquidation.

A Merrill Lynch spokeswoman declined comment and a Bank of America spokesman could not immediately be reached for comment.

Merrill, stuck with some of the same toxic debt — much of it mortgage-related — which torpedoed Lehman’s balance sheet, has been hit hard by the credit crisis and has written down more than $40 billion over the last year.

Last month, Thain arranged to sell over $30 billion in repackaged debt securities to Dallas-based private equity firm Lone Star Funds.

“I’m surprised that Merrill Lynch would want to sell at this point,” said Bill Fitzpatrick, an analyst at Optique Capital in Milwaukee.

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