Singapore sovereign wealth fund Temasek Holdings Pte. Ltd. did some bargain hunting during Monday's market turmoil, as it
increased its stake in Merrill Lynch & Co. to 13.7% from 9.4%, according to a U.S. regulatory filing.
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Shares of Merrill Lynch fell 19% to $22.00 on Monday.
Temasek is already Merrill's largest shareholder and had received
regulatory approval
for its plans to bump its Merrill holdings past a 9.9% limit for foreign
investors. In spite of the incredible pressure on the banking sector,
Temasek has been a big believer in Merrill Lynch, steadily increasing
its stake in the investment bank even as the stock's value plummeted.
The all-stock acquisition of Merrill by Bank of America Corp. still leaves
Temasek with the value of its investment in the red. According to
Reuters Merrill Lynch shares were worth just under $26 at market close
on Monday, with Bank of America shares closing at $30.25. Temasek put
$5 billion into Merrill at $48 a share between December and February,
but a reset payment for losses on the original investment and
additional $900 million poured in last month ended up averaging out the
sovereign wealth fund's buy-in price to only $23.11 a share, based on
Bloomberg calculations from exchange filings.
- George White
See Reuters story
See Dealscape post on Temasek stake
See Bloomberg calculations
