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boilerbanker's picture

Premium for ML???

by boilerbanker (Baboon, 108 Banana Points Points) on 9/15/08 at 12:17am

Why is BAC paying a premium on ML? shouldn't they have waited a few weeks and bough ML at a much cheaper price? i'm just curious...

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Edmundo Braverman's picture

By then

by Edmundo Braverman Certified User(Senior Orangutan, 387 Banana Points Points) on 9/15/08 at 1:19am

By then Merrill would have found another buyer. They were pimping the firm out to several others this weekend, BofA was just the first to pull the trigger.

For some reason, ML did not want to face tomorrow under their own banner UNDER ANY CIRCUMSTANCES. Makes you wonder.

mwgr5's picture

BoA specific synergies could

by mwgr5 (Senior Baboon, 213 Banana Points Points) on 9/15/08 at 1:45am

BoA specific synergies could also justify the premium. For example, the acquisition adds ML's lucrative thundering heard of private wealth managers, asset management stake in BlackRock, and generally better brokerage and Ibanking services. Also, this is an all stock deal, so theoretically if the market thinks BoA overpaid for ML, BoA's stock price should drop lowering the ultimate acquisition price.

www.sharpeinvesting.com

junkbondswap's picture

Another reason why BOA

by junkbondswap Certified User(Gorilla, 638 Banana Points Points) on 9/15/08 at 9:20am

Another reason why BOA purchased now and not while the ship was on its way down is because of consumer confidence and counter-party risk.