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Merrill Deal Yields $6.2B in Capital

Posted Dec 24, 07 1:07 PM CST in Business 

(Newser) – With another quarter of massive writedowns looming, Merrill Lynch today announced a deal to raise up to $6.2 billion by selling discounted stock to two investors. Up to $5 billion will come from Temasek Holdings, Singapore's state-owned investment company. The other $1.2 billion comes from money managers Davis Selected Advisors, the Wall Street Journal reports.

The newly created common stock is being sold for $48 a share, 14% lower than Friday’s closing price. Neither company will have a hand in Merrill’s management. Merrill also agreed to sell its middle-market commercial-finance business to GE Capital. The bank is expected to write down $8 billion in mortgage-related losses this quarter, after $8.4 billion in Q3.

Sources Wall Street Journal, Bloomberg

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A Merrill Lynch office is seen in York, Pa., Wednesday, Oct. 24, 2007. (AP Photo/Carolyn Kaster)   (Associated Press)
A man walks out of the Temasek Tower in Singaporee in this Oct. 12. 2004 file photo. Investment bank Merrill Lynch & Co. on Monday, Dec. 24, 2007 said it sold a stake in itself to Temasek Holdings and...   (Associated Press)
People arrive at the Merrill Lynch building on a rainy morning in New York in this Nov. 15, 2007 file photo. Merrill Lynch & Co. shares rose Friday, Dec. 21, 2007, on a report that the nation's biggest...   (Associated Press)
People walk past the Merrill Lynch building on Thursday, Nov. 15, 2007 in New York. John Thain, CEO of NYSE Euronext, was chosen on Wednesday to lead Merrill Lynch effective Dec. 1. (AP Photo/Brian McDermott)   (Associated Press)
A Merrill Lynch office is seen in New York, Wednesday, Oct. 24, 2007. Wall Street recovered from deep losses Wednesday on the possibility of a rate cut, but still traded lower, cautious about Merrill...   (Associated Press)
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