from Summit Notebook:
Thain says put shareholders first
John Thain says he put shareholders first and his interests second in deciding to sell Merrill Lynch to Bank of America.
Thain, speaking at the Reuters Global Finance Summit in New York, said a deal to sell a partial stake in Merrill Lynch to Goldman Sachs would have been better for him, but the sale of the entire Wall Street firm to Bank of America was the best outcome for shareholders.
Over a fateful weekend in September 2008, as Lehman hurtled toward bankruptcy, AIG floundered and the financial system looked into the abyss, Merrill held discussions with Bank of America, Goldman Sachs and Morgan Stanley for various transactions, Thain said.
Initial discussions with Bank of America involved either the sale of the entire company or a 9.9 percent stake and a multibillion credit line, the former Merrill CEO said.
With Goldman, discussions only involved the stake sale and the credit line. Discussions with Morgan Stanley about a strategic transaction were brief, he said.
"When Bank of America offered $29 a share on Sunday afternoon, it was clear to me that was the best thing for our shareholders," Thain said.
Thain was fired by Bank of America soon after the deal closed, and is now considering a career in private equity and other jobs.
Lehman and its aftermath, by the numbers
With apologies to Harper’s Index, some collected statistics on the collapse of Lehman and the roller-coaster year that followed.
Add your own significant digits in the comments section.
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Number of siblings who made up the original Lehman Brothers, founded as a dry-goods store in 1844:
Age of Bavarian immigrant Henry Lehman when he founded the business:
Percentage difference between the DNA of former Lehman CEO Dick “The Gorilla” Fuld and an actual gorilla:
The percentage of people that truly understand why this happened. .003%, most likely fewer!
Thain, Lewis part ways
John Thain’s out of the door as well. And one wonders if Ken Lewis could have saved himself a lot of heartache if only he had watched the action movie “Speed”.
Sandra Bullock called it more than a decade ago. As her character says in the movie: You know, relationships that start under intense circumstances — they never last.
Thain’s departure leaves Lewis without several top executives at Merrill, which it acquired on Jan. 1 for $19.4 billion. Other top Merrill executives to recently leave include Robert McCann, who was to lead the combined brokerage, and investment banking chief Greg Fleming.
The acquisition has cost Bank of America dearly. It said Merrill lost $15.31 billion in the fourth quarter, separate from its own $1.79 billion quarterly loss — its first in 17 years.
Just a week ago, Lewis told investors he was happy that Thain was staying on. But the situation changed rapidly.
“Ken Lewis flew to New York today, met with John Thain, and it was mutually agreed that his situation was not working out, and he would resign,” Bank of America spokesman Robert Stickler said.
Thain’s departure came as CNBC separately reported the former Merrill chief had hired well-known Los Angeles interior designer Michael Smith to redecorate his office a year ago. CNBC said Thain ran up a bill of $1.22 million that included $35,115 for a “commode on legs” and $1,405 for a parchment waste can.
