Report: Merrill looking to sell more stake

Merrill Lynch is searching for more bidders in China and the Middle East, according to London’s Observer.

Merrill Lynch, having just sold a stake to a Singaporean investment firm, is searching for more bidders in China and the Middle East, according to London’s Observer.
John Thain, chief executive of the Wall Street firm, was in talks with sovereign wealth funds from those regions last weekend, insiders told the paper.
The firm, reeling from $8 billion in subprime losses, is concerned that the situation may worsen and fears that the cash from the $4.4 billion sale to Temasek of Singapore may not be enough to buffer write-downs of as much as $10 billion in the fourth quarter, an source told the Observer.
The new Merrill CEO also spent his New Year’s break working with top people at the firm on “scenarios” to save the bank in the event of a worsening credit crunch, sources told the Observer.
Among those solutions was the possibility of merging with another banking group, which was considered “an extreme scenario,” the insider noted.
Just last week, Merrill sold several stakes as part of a plan to raise capital. Some $1.2 billion in shares went to Davis Selected Advisers of Tucson, while GE Capital bought up Merrill Lynch Capital and freed up $1.3 billion in equity.