Is Ken Lewis Over Confident?

In my humble opinion this is crazy. Bank of America took out MBNA and recently Countrywide and now Merrill. Too much too soon!


Merrill and BofA begin acquisition talks
By Francesco Guerrera in London
Merrill Lynch is in talks to be acquired by Bank of America in a sign that the crisis gripping Lehman Brothers is forcing rival investment banks to seek partners to avoid suffering the same fate.
People close to the situation said Bank of America had entered discussions with Merrill after pulling out the bidding for Lehman in a dramatic turn, partly prompted by the US government’s refusal to supply financial help for a Lehman takeover.
Bank of America and Merrill Lynch declined to comment but people close to the situation said no final price had been set, however the two sides were discussing a takeover at a substantial premium to Merrill’s closing price of $17.05 per share on Friday. One person said the price could be as high as $30 per share, valuing Merrill, whose shares have fallen nearly 70 per cent this year, at more than $45bn.
BofA’s chief executive Ken Lewis has long coveted Merrill in the belief that a merger the lender’s commercial banking operations and Merrill’s retail brokerage arm would be a formidable combination in the US financial services industry.
Bankers said that BoFa’s move could flush out other bidders for Merrill and added that the decision by John Thain, Merrill’s chief executive, to put the firm up for sale could put pressure on other investment banks such as Morgan Stanley and Goldman Sachs to also hit the takeover trail.
Copyright The Financial Times Limited 2008