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Thain says put shareholders first
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.
“The risk to the shareholders, the risk to the company that a 9.9 percent stake and a multibillion dollar credit facility might not be enough was much too high,” Thain said. “Now, for me personally, it might have been better. But my job was to protect the shareholders.”