Bloomberg, a stake of one’s own

June 13, 2008

When we heard that Merrill Lynch wasn’t ruling out a sale of its stake in newswire and financial information service Bloomberg LP, we had to wonder who would want it. Morebloomberg.jpg to the point, we had to wonder who wouldn’t. As our story explained, Bloomberg probably (though we can’t say for sure) is a lucrative enterprise that any investor would want to profit from.

As it turns out, wanting something is fine, but just because you want something doesn’t mean you’re going to get it. Here’s the problem: at an estimated $6 billion, Merrill’s Bloomberg stake is way too expensive for most media companies. Not only that, the companies who could afford it — private equity and sovereign wealth funds — are unlikely to raise the cash to take a shot at it. The reason? They like the control that money brings, and with Bloomberg that’s not going to happen.

I spent some time with a high-level (and of course anonymous) source who knows how things work at Bloomberg, and here’s what that source had to say about it:

We’re talking about taking a minority position in a privately held country company that is completely controlled by the mayor of New York City who gets to do whatever he wants. You have less say than you would have if you were the owner of 10 shares of General Motors.

If Merrill wants to sell, the easiest deal is to call Mike and come to a deal, my guess is, he’d do the deal.

Well, Bloomberg did say he wasn’t interested in newspapers.


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Is it that problem or any indication of upcoming financial problems with Merill Lynch?

Posted by Cool Pilot | Report as abusive

1) Bloomberg is probably profitable but you can’t say for sure? How does profit margins in the vicinity of Microsoft;s or better strike you? The place oozes money.2) Mike has a right of first refusal in any event. He already bought back one-third of Merrill’s original 30% stake 12-13 years ago.3) Can you clean up your anonymous source’s quotes, for heaven’s sake? “…a privately held country”? Or, was that unexpurgated and thus a reflection of their insight?

Posted by Stu Sutcliffe | Report as abusive

Hi Stu, or is that the Sixth Beatle?Yes, the profit margins likely are really, really fine, as Mr. Wetmore in our original story on the wire points out. I just can’t say for sure because no one at Bloomberg will tell me. I’ll keep trying.As for the “country,” that was a typo on the reporter’s (my) part. I fixed it. Thanks for flagging it.

Posted by Robert MacMillan | Report as abusive

[…] decides to sell its stake in Bloomberg, who be the most likely buyer? Reuters’s MediaFile has a possible answer — […]

Posted by Afternoon Reading: XM-Sirius Nears the Finish Line | Report as abusive

[…] * Who will buy Merrill Lynch’s minority stake in Bloomberg LP? Robert MacMillan thinks there is only one viable candidate. […]

Posted by PE HUB » Blog Archive | Report as abusive