‘Merrill to sell Bloomberg stake for $4.5bln’

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Merrill Lynch & Co Inc has agreed to sell its 20 per cent stake in Bloomberg LP back to the news and financial data company for about $4.5 billion, a source familiar with the situation said on Wednesday.

The Wall Street investment bank and brokerage has also decided to retain its 49.8 per cent stake in money manager BlackRock Inc, the source said.

Merrill is expected to announce the sale of the Bloomberg stake on Thursday when it also announces second-quarter results, the source said.

Merrill spokeswoman Jessica Oppenheim and BlackRock spokesman Brian Beades declined to comment. Bloomberg did not immediately return a phone call and e-mail seeking comment.

Selling the Bloomberg or BlackRock stakes could help Merrill Chief Executive John Thain raise capital to make up for write-downs related in part to sub prime mortgages.

Analysts on average expect Merrill to report a second-quarter loss of $1.94 per share, its fourth straight quarterly one, according to Reuters Estimates.

Merrill may take write-downs totalling as much as $6 billion, analysts have said, on top of more than $30 billion in write-downs since the third quarter of 2007.

Bloomberg was founded by billionaire Michael Bloomberg, who is now New York's mayor and still owns about 70 per cent of the company. It is not immediately clear what role, if any, he has played in the Merrill transaction.

Thain told investors last month that Merrill's 20 per cent stake in Bloomberg was worth roughly $5 billion to $6 billion.

Merrill took its stake in BlackRock when it sold the company its investment management business in 2006.

It would plan to retain a strategic relationship with BlackRock even if it sold part of the stake, a person close to Merrill said earlier this month.

BlackRock is run by Laurence Fink, once considered a top candidate to run Merrill after the ouster in October of Stanley O'Neal. Thain took the job after previously running NYSE Euronext.