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Blackrock CEO Seeking Partner To Buy 35% BofA Stake Per Charlie Gasparino

Tyler Durden's picture




 

A few days ago, we penned The BlackRock - Bank Of America Ownership Catch 22, in which we discussed the incestuous cross-onwership relationship between the two companies. Then we said:

"It is well known that Bank of America owns 34% of BlackRock via a legacy
position inherited from Merrill Lynch, arguably the most valuable part
of the business. As of today, the stake is worth around $11.5 billion.
Yet what may be a little less known is that BlackRock has also returned
the favor, and is now the largest holder of Bank of America, owning 5.35% of the outstanding BAC shares, for a total value of $6.6 billion. Does
that mean that there is a wash in there somewhere? Who cares. But one
thing that certainly is involved, is a massive conflict of interest,
especially in the context of litigation. And a big question mark - to
claim that BlackRock is willing to impair a nearly $7 billion investment
is naive. Instead, due to the incestuous nature of Wall Street, and the
cross pollination of MBS holders, is today's action merely a ploy to
get some of the more "impacted" parties to promptly settle and eliminate
any possible future litigation? PIMCO, for one, and the FRBNY fir
another, have the most to lose if the MBS crisis escalates, and if all
MBS are unwound. Which means that somehow this is simply another
diversion, with the real action taking place somewhere."

The action is indeed "elsewhere" - Charlie Gasparino has just reported that Larry Fink is seeking a partner to buy 35% of Bank of America. What better way to sweep all the problems underneath the rug than to just buy them all up...

More from Fox Business:

Blackrock (BLK: 167.29 ,+1.02 ,+0.61%) CEO Larry Fink is approaching investors across the globe to step in and possibly buy a chunk of the large money management company that is currently owned by Bank of America (BAC: 11.44 ,+0.08 ,+0.75%), people close to matter tell FOX Business Network.

Bank of America owns a 34% stake in Blackrock, an investment that transferred to the Charlotte, N.C.-based bank when it purchased Merrill Lynch in 2008. Merrill bought a stake in Blackrock in 2006; at the time it was one of the most high-profile deals on Wall Street, with Merrill selling Blackrock’s mutual funds and other investments to clients of its massive brokerage division.

But times have changed on Wall Street since the housing market tumble, nearly toppling every major bank including BofA. Since the 2008 financial collapse, regulators have prodded banks to increase their capital levels as a safety cushion against losses. The recent US and global financial reform rules will also force banks to increase their capital, which is pushing BofA to unload its stake in Blackrock

People at Blackrock believe that in the coming months BofA will do just that, and for that reason, Fink, the money management company’s CEO and founder, is traveling the world seeking potential investors. A person close to Fink says he has investors lined up should BofA decide to make its move and sell its Blackrock shares.

A spokeswoman for Blackrock declined to comment; a spokesman for BofA didn’t return a call for comment.

And, as a reminder:

Bank of America Holders:

BlackRock Holders:

 

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Fri, 10/22/2010 - 14:36 | 670236 cossack55
cossack55's picture

Have him check with Soros or Buffet.  Two scumbags in a pod and all that.

Fri, 10/22/2010 - 14:37 | 670245 NOTW777
NOTW777's picture

even buffet is not that low.

soros in a satanic class by himself

Fri, 10/22/2010 - 15:10 | 670319 egdeh orez
egdeh orez's picture

I dont understand what people here hates Soros so much.

Fri, 10/22/2010 - 18:13 | 670639 TheGoodDoctor
TheGoodDoctor's picture

I like Soros, I listen to what he says. But he donates too much money to shit groups that are the undoing of the world under the guise of generosity. Much like the eugenics programs Bill and Melinda Gates support. Or like the African AIDS deal with Bono. Who is just a useful idiot, I'm sure, to those in power. Not that Bono's heart isn't in the right place.

Sat, 10/23/2010 - 12:42 | 671910 pamriallc
pamriallc's picture

consider just how correct Soros has been.  he has written books on the bubble of american supremacy, given hundreds of millions away, and like all of us he's been imperfect, and quite willing to publicly admit he's still got to refine his philosophy.

consider that every time something looks untenable and impossible, the cave men gathered around the fire and said that the "end was nigh" and grumbling behan.

here's a direct example of our interpretation of horse manure: 

http://www.uctc.net/access/30/Access%2030%20-%2002%20-%20Horse%20Power.pdf

note that this was just before yet another incredible technology revolution self-corrected the "problems of the day" and the idea that it won't happen again is pretty insane.

Soros admits when he's wrong, and admits to his own fallability.  Many people don't have the guts t "change their mind" when presented with the facts.  More comfortable for people to wait for the next collapse so that the 30 years of subsequent recovery will make them right (again) after a few decades.  I don't see much wisdom in that process.

love the attached link--- horse manure to the sky in manhattan, and other fine predictions.

shawn a. mesaros,   pamria, llc

Fri, 10/22/2010 - 14:38 | 670237 NOTW777
NOTW777's picture

LOL, attack, threaten to sue and then buy your prey

Fri, 10/22/2010 - 14:36 | 670240 bugs_
bugs_'s picture

stinky - have to hold your nose to study this one

Fri, 10/22/2010 - 14:36 | 670241 Tiberius
Tiberius's picture

So who buys Blackrock's share of BoA?  The only suckers dumb enough (or smart enough if their goal is to continue to enrich their friends) to do that are the federal government, right?  

Fri, 10/22/2010 - 14:39 | 670250 NOTW777
NOTW777's picture

other night fink says to reporter - theres no lawsuit, media ,misleading then later claims he knows nothing about it. attorney is already hired

Fri, 10/22/2010 - 14:41 | 670253 mule65
mule65's picture

Good strategy.  Buy a bunch of Calls.  Sell a bunch of Puts.  Announce 2x buyout.

Fri, 10/22/2010 - 14:42 | 670257 israhole
israhole's picture

Larry Fink..LOL, what a name!

Fri, 10/22/2010 - 14:43 | 670263 williambanzai7
williambanzai7's picture

What goes around...

Fri, 10/22/2010 - 14:58 | 670294 Spitzer
Spitzer's picture

how did you get pic posting rights ?

Fri, 10/22/2010 - 15:26 | 670355 williambanzai7
williambanzai7's picture

Hi Elliot, wrote a nice essay for you yesterday. Check it out.

Fri, 10/22/2010 - 15:30 | 670364 Cognitive Dissonance
Cognitive Dissonance's picture

how did you get pic posting rights?

LOL

There was a glitch in the Matrix and WB7 slipped through when everyone had their head up their ass.

Considering WB7's profound productivity since then, they severely regret not shooting him on sight when they had the chance.

Fri, 10/22/2010 - 15:46 | 670391 williambanzai7
williambanzai7's picture

Actually I slipped in on the back of the Stuxnet virus ;-)

Fri, 10/22/2010 - 17:17 | 670525 Cognitive Dissonance
Cognitive Dissonance's picture

Deja vu you?

Fri, 10/22/2010 - 15:49 | 670395 williambanzai7
williambanzai7's picture

Actually I slipped in on the back of the Stuxnet virus ;-)

Fri, 10/22/2010 - 17:17 | 670526 Cognitive Dissonance
Cognitive Dissonance's picture

Deja vu you?

Fri, 10/22/2010 - 14:46 | 670268 AccreditedEYE
AccreditedEYE's picture

Maybe Paulson wants to double down... in size.  Heck, he can get the rest of the HF gang that are long financials to help him out and they can do a club transaction. lol

Fri, 10/22/2010 - 14:51 | 670285 vote_libertaria...
vote_libertarian_party's picture

So does Blackrock have a cash flow problem?  Sees that BAC could be a penny stock soon?  I'm already assuming BAC is having a cash flow problem.

 

 

Fri, 10/22/2010 - 14:56 | 670292 Spitzer
Spitzer's picture

I used to have allot more respect for Paulson and Co. He is overrated.

Fri, 10/22/2010 - 15:08 | 670304 MarketTruth
MarketTruth's picture

Who will buy... who will buy...

Will this create a new theme song (or five) for the new Financial OLIVER off-Broadway play?

One bank,
Bank for sale.
It's going cheap.
Only seven guineas.
That or thereabouts...
--------------------------

In this life, one thing counts:
In the bank, large amounts!
I'm afraid these don't grow on trees,
You've got to pick a pocket or two.
You've got to pick a pocket or two, boys...

----------------
ALL: Hang ev'rything!
We'd risk life and limb
To keep financials in the swim.
Yes, we'd do anything!
BERNANKE: Anything?
ALL:   Anything for you.

---------------------

BoA: Who will buy my sweet MBS
Two backed securities for a penny.
Who will buy my sweet MBS?
Two backed securities a penny.

-----------

I'm reviewing the situation:
I must quickly look up ev'ryone I know:
CFTC & SEC people -- with a station --
Who can help me make a real impressive show!
With friendliness, as much as is
Befitting of my new estate...
 "Good morning to you, magistrate!"...
I think I'd better think it out again.

Fri, 10/22/2010 - 15:02 | 670308 Sudden Debt
Sudden Debt's picture

Okay okay, I'll buy it!

euh...

somebody can spare a brother a few billion?

I'm good for it.

I'll pay you back after the whole hyperinflation stuff!

 

Fri, 10/22/2010 - 15:26 | 670312 Cognitive Dissonance
Cognitive Dissonance's picture

Blackrock CEO Seeking Partner (To Buy)

Looks like an add in an alternative "singles" or "swingers" newspaper or newsletter.

Not that there's anything wrong with that. :>)

Fri, 10/22/2010 - 15:11 | 670323 TradingJoe
TradingJoe's picture

Hah, Bob, the "Dole" does not seem to own any of the BLK/BAC stock?!?! Why is that? he who says constantly BUY BUY BUY?!?! I guess to won BAC now is to hit a few more points with one bat: BLK will take BAC nuder it's "wing", BAC will show "relative performance" through some BLK accounting(engineering) and so gov is pleased, Paulson, aka the greatest trader ever, shows "no loss" on his position and thus no redemption requests, etc etc etc win win win for "all"! What a JOKE THIS IS! ANYONE with A BRAIN ...MOVE somewhere else! 

Fri, 10/22/2010 - 15:13 | 670328 Mezotarkus
Mezotarkus's picture

The earlier article that Blackrock owns a significant amount of BAC is ridiculous.  These are shares that Blackrock owns for their customers!  That's why you see State Street and other large custodians on the list of most major public companies as the largest shareholders.  It doesn't mean the custodians are trying to take over the world but rather they are the owner of record as custodian.  I thought people here are supposed to understand such basic concepts of the financial world.

 

 

Fri, 10/22/2010 - 15:32 | 670368 AccreditedEYE
AccreditedEYE's picture

Custodians are a different animal than asset managers... and there is a big difference between an allocation towards a big bank and over 5% of the float. But hey, what the f do I know!

Fri, 10/22/2010 - 15:29 | 670360 mule65
mule65's picture

30 minutes to go.  C'mon robots!  Kick start the Diamonds!

Fri, 10/22/2010 - 15:31 | 670365 Waterfallsparkles
Waterfallsparkles's picture

Sounds like Black Rock has something BIG to hide. 

Fri, 10/22/2010 - 16:07 | 670383 AccreditedEYE
AccreditedEYE's picture

You mean BAC? Fink is acting as a broker here. If anything, you could say BAC is trying to raise capital and having Fink make the announcement. lol... THEN he'll go for the mortgage put back!  <It's all legit...> 

Fri, 10/22/2010 - 15:55 | 670403 prophet
prophet's picture

Like I've been saying, trying to extricate ML.

Fri, 10/22/2010 - 17:32 | 670551 tom
tom's picture

Reads like Blackrock management is seeking a buyer for BoA's 34% stake in Blackrock. There is nothing in the cited article that suggests anyone is looking to buy or being sought to buy a 35% stake in BoA.

So looks like a divorce, not a deepening intertwinement.

Fri, 10/22/2010 - 18:14 | 670643 TheGoodDoctor
TheGoodDoctor's picture

Who in their right mind would buy 35% of BOA right now?

Fri, 10/22/2010 - 19:24 | 670765 tom
tom's picture

Depends on the price. I've got some old Moldovan Lei I'm willing to part with. About the size and quality of Monopoly money, and worth almost as much.

It is a snakepit of conflicts of interest, to be sure. Blackrock is on one hand trying to pursue pushbacks against BoA, on the other hand holding (for itself or clients, I dunno) more than 5% of BoA. BoA is on one hand trying to fight off Blackrock over these pushbacks, but on the other hand owns 34% of Blackrock, so by trying to stiff Blackrock, BoA is kinda trying to stiff itself.

What I don't get is, why would BoA sell the Blackrock stake ahead of the resolution of a dispute that could end with it being forced to disgorge billions of dollars to Blackrock? Seems to me you keep the Blackrock stake as a hedge, so if you lose the pushbacks battle to Blackrock, that stake's worth more.

Fri, 10/22/2010 - 23:30 | 671284 arthur darrell
arthur darrell's picture

Paulson

Sat, 10/23/2010 - 22:48 | 672729 Downtoolong
Downtoolong's picture

O.K., Wall Street has finally done it. This thing is so confusing I can't even figure out whether I want to be long or short. How are you supposed to front run a stuation when there's an ass on both ends. Guess I'll just sit on the sidelines and watch. 

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guccichanel's picture

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