Merrill may ditch a bundle of Bloomberg

Merrill Lynch & Co. Inc. will be forced to raise capital in the third quarter and may sell 20% of its holdings in Bloomberg LP, according to Ladenburg Thalmann & Co. Inc. analyst Richard Bove.
The move would bring in cash and allow Merrill to value its remaining position in the New York-based financial information company at $4 billion, thus solving the company’s need for near-term capital, according to a note to clients cited in a Reuters report.
“My estimate is that the firm could show a net negative revenue number of $2.5 billion in its principal transaction line or a figure consistent with the first-quarter result,” Mr. Bove said.
He expects the New York-based brokerage company to record a 2008 loss of $1.64 per share, compared with his previous estimate of a profit of $1.37 a share.
Mr. Bove also cut his price target on Merrill shares to $30 from $39 and kept his ‘‘sell” rating on the stock.

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