To say that Merrill Lynch & Co. had a rough week is an understatement. The
New York investment bank announced one of the worst quarterly earnings
performances ever, due to its exposure to subprime debt. The results triggered
possible mutiny over its CEO E. Stanley O'Neal. Meanwhile, O'Neal was
incidentally talking
with
Wachovia Corp. over a possible merger. But despite all this, Merrill was
able
to
pull off a C$475 million ($494 million) deal for a slice of the biggest
leveraged buyout deal in history, the C$51.7 billion buyout of Canadian
telecom giant BCE Inc., according to SEC statements.
Merrill would buy into the Ontario Teachers' Pension Plan-led group — which
also includes Providence Equity Partners LLC of Providence, R.I., Chicago's
Madison Dearborn Partners LLC and Toronto-Dominion Bank — on the same terms as
the other members of the consortium. The SEC filing on Thursday indicates that
Merrill is essentially adjusting its position in BCE at a time when most other
investors will be cashing out, writes TheDeal.com senior reporter Peter
Moreira. In short, Merrill is taking a gamble that if successful makes the New
York bank look like a genius, but who knows if O'Neal will be around long
enough to reap the rewards. — Gerald Magpily
See
The Deal.com: Merrill enters BCE buyout group
See
Dealscape: Merrill Lynch-Wachovia tie up talk
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