HFS Batman,
HFS BATMAN!!!!
let's get this right, Lehman just filed for bankruptcy.
http://www.nytimes.com/
In one the most extraordinary days in Wall Street’s history, Merrill Lynch is near an 11th-hour deal with Bank of America to avert a deepening financial crisis while another storied securities firm, Lehman Brothers, hurtled toward liquidation, according to people briefed on the deal.
Merrill lynch is doing a forced sale to BofA.
Bear stearns is gone.
The Wall street firms are vanishing.
Screw Palin, Wall Street is sinking faster the Titanic.
Lehman will seek to place its parent company, Lehman Brothers Holdings, into bankruptcy protection, as its subsidiaries remain solvent while the parent firm liquidates, these people said. A consortium of banks will provide a financial backstop to help provide an orderly winding down of the 158-year-old investment bank. And the Federal Reserve has agreed to accept lower-quality assets in return for loans from the government.
Lehman has retained the law firm Weil, Gotshal & Manges. The firm’s restructuring head, Harvey Miller, also spearheaded Drexel’s bankruptcy filing in February 1990.
As efforts to acquire Lehman faltered, Bank of America turned to Merrill Lynch and offered at least $38.25 billion in stock for that investment bank, people briefed on the negotiations said. The deal, valued at $25 to $30 a share, could be announced as soon as Sunday night, these people said. Merrill shares closed at $17.05 on Friday.
Edit 1: Now what i don't get is why BofA offered a premium for Merril, i don't value merrill at more then
5 bucks a share, myself.
Paulsen must have given in 50 billion.
AIG is trying to get a Fed emergency loan Jeez....
Edit 2: AIG is sellign everything, and Bernanke is taking equities as collateral?
WTF, WTF! WTF!!!, Is bernanke on crack? The point of the Fed is to add liquidity
to illiquid assets, equities are totally liquid, unless bernanke thinks that the
markets are going to seize up totally.
Edit 3:
I thought it was Odd Merrill did a stock sale for above the price, so here's the deal
from mish: http://globaleconomicanalysis.blogsp...
There were at least some smart investors who noted the downward trend and successfully negotiated for downside protection. We know of at least two cases (though there are doubtless others); namely, Merrill Lynch’s $12.8 billion investment from Temasek (the Singapore sovereign wealth fund) and Washington Mutual’s $7 billion raise from TPG (a private equity firm).
Quite unbeknownst to the general public at the time, downside protection was built into these equity raises to protect these investors. They are called “look back” provisions or “full ratchet” compensation.
I suspect merrill had some ratchets they were trying to clik stop by this sale, something wild went on
and by doing this acquisition at this price, they avoid that, but it's got to have some sort of backside
sweetener to make this work